Using an Internet web browser, search for AICPA’s Statement on Standards for Attestation Engagements (SSAE) No. 18, and perform the following: a. Explain the relevance of SSAE 18 and what….
Calculate the transfer price.
Gruber Corporation manufactures the components of its products at its Parts Manufacturing division. Each component costs $15 in variable costs to produce. The components are transferred to the Assembly division, where they are assembled into the final product, which costs $30 per unit, plus the cost of components from the Parts Manufacturing division. Fixed costs are $200,000 for Parts Manufacturing and $350,000 for Assembly. The Parts Manufacturing division could sell the components on the market for $25. Gruber sets its transfer prices at variable cost plus 20%. Calculate the transfer price.