The Lumber Division of Paul Bunyon Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Construction Division. The following data have been gathered for the coming period: Lumber Division:
Capacity200,000 board feet
Price per board foot$2.50
Variable production cost per bd. ft.$1.25
Variable selling cost per bd. ft.$0.50
Construction Division:
Board feet needed60,000
Outside price paid per bd. ft.$2.00
If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.
If current outside sales are 130,000 board feet, what is the minimum transfer price that the Lumber Division could accept?
a. $1.25
b. $1.40
c. $1.75
d. $2.50

The chromosome manufacturing company produces two products, x and y. the company president, jean mutation, is concerned about the fierce competition in the market for product x. she notes that competitors are selling x for a price well below chromosome's price of $13.50. at the same time, she notes that competitors are pricing product y almost twice as high as chromosome's price of $12.50.ms. mutation has obtained the following data for a recent time period: product x product y number of units 11,000 3,000 direct materials cost per unit $3.23 $3.09 direct labor cost per unit $2.22 $2.10 direct labor hours 10,000 3,500 machine hours 2,100 1,800 inspection hours 80 100 purchase orders 10 30ms. mutation has learned that overhead costs are assigned to products on the basis of direct labor hours. the overhead costs for this time period consisted of the following items: overhead cost item amount inspection costs $16,200 purchasing costs 8,000 machine costs 49,000 total $73,200using direct labor hours to allocate overhead costs determine the gross margin per unit for product x. choose the best answer from the list below.a. $1.93b. $3.12c. $7.38d. $2.43e. $1.73using activity-based costing for overhead allocation, determine the gross margin per unit for product y. choose best answer from list below.a. $10.07b. ($2.27)c. ($5.23)d. ($7.02)e. $7.02