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how do I calculate the transfer price here? what's the correct answer?
how do I calculate the transfer price here? what's the correct answer?
I thought it was $8.14, because:
selling 30000 units internally = 5000 units of sales loss * 1.5 (contribution margin) = $75000 loss.
This amount should be spread thru 35000 units sold internally > 75000/35000 = $2.14 opportunity cost charged per unit
Therefore 6 + 2.14 = $8.14
Am I correct?