Cost of Producing HDP unit

1 Direct Material cost 8 $

2 Direct Skilled labor 30 $
3 Unskilled labor 5 $
4 Purchase componenets 15 $
5 variable overhead 12 $

Total Variable cost 70 $

Selling price for HDP unit 115 $
contribustion marging for HDP unit sold 45 $

Cost of producing LDP unit

1 Direct Material cost 3 $

2 Direct Skilled labor 5 $
3 Unskilled labor 5 $
4 Purchase componenets 5 $
5 variable overhead 4 $

Toatal variable cost 22 $

Selling cost of LDP unit 28 $
Contribustion margin for LDP unit sold 6 $

Volkmar Construction
Rate
Direct labor cost 10.5 $
Unskilled labor 4.5 $ 0.5
Skilled labor 51 $ 17
Purchased components 150 $
variable overhead 12 $

Toatal variable cost 228 $

considering the HDP for TCH-320 from Volkmar's perspective

cost saving per unit in raw material 5.5 $

cost of control pack puchased from Asian
electronic comapany 145 $
Transportation cost per unit 4.5 $
increased skilled labor cost due to extra 2 hr 34 $

Maximum transfer cost for Volkmar to accapt the HDP 112 $

Minimum Transfer cost for Hudson bay to sell the HDP 115 $
loss of contribution marging on each unit sold of HDP to volkmar -3 $
Answer-2 From the perspective of General Instrumentation's Top management, Volkmar can cont
buy the HDP from the Hudson Bay as it ll incur a loss of 3$ on contribustion margin

Answer#3 marginal profit/loss of transferring 10000 uni -30000 $ Loss of 30000$ in general instru

Answer #4 Minimum transfer price for Hudson bay divis 115 $ market selling price of HDP unit

Answer #5 Maximum transfer price for Volkmar Tech. div 112 $ above this price will incur loss t

Answer #6 Recommended transfer price There can not be any recommendation as setting any p
$/hr
$/hr
nt, Volkmar can cont
bustion margin

Loss of 30000$ in general instruments total income will occur

market selling price of HDP unit

above this price will incur loss to volkmar

ecommendation as setting any price will cauuse a negative impact on division & company's income