The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs variable costs of $208 per windshield and has capacity to make 670,000 windshields per year. The market price is $530 per windshield. The Windshield division incurs total fixed costs of $4,000,000 per year. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions? Transfer price per windshield will be at least but not more than

Managerial Accounting: The Cornerstone of Business Decision-Making
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Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
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Chapter11: Performance Evaluation And Decentralization
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The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs
variable costs of $208 per windshield and has capacity to make 670,000 windshields per year. The market price is $530 per
windshield. The Windshield division incurs total fixed costs of $4,000,000 per year.
If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between
the Windshield and Assembly divisions?
Transfer price per windshield will be at least
but not more than
Transcribed Image Text:The Windshield division of Jaguar Company makes windshields for use in its Assembly division. The Windshield division incurs variable costs of $208 per windshield and has capacity to make 670,000 windshields per year. The market price is $530 per windshield. The Windshield division incurs total fixed costs of $4,000,000 per year. If the Windshield division has excess capacity, what is the range of possible transfer prices that could be used on transfers between the Windshield and Assembly divisions? Transfer price per windshield will be at least but not more than
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