Flash E-Card Manufacturing manufactures software parts for the computer software

Question

Flash E-Card Manufacturing manufactures software parts for the computer software systems that produce e - cards. The Flash II part is currently manufactured in the Computer Department. The Data Department also produces the part and the plant has NO excess capacity to produce the Flash Il part. The current market price of the Flash I part is $700. The managerial accountant reported the following manufacturing costs and variable expense data Flash E-Card Manufacturing Manufacturing Costs and Variable Expense Report Flash Component Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead (current production level) Variable selling expenses (only incurred on sales to outside consumers) $160 $140 $105 $136 If the highest acceptable transfer price is $700 in the market, what is the lowest acceptable in - house price the Data Department should receive to produce the part OA. $276 OB. $555 O C. $691 O D. $700

Explanation / Answer

Ans) option B 555

150 + 160 + 140 + 105 = 555

Lowest acceptable in house price = 555

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