alberta company requires the division to use a transfer price based on the variable 638010

Alberta Company requires the division to use a transfer price based on the variable cost of the sole. With no excess capacity, the contribution margins per unit for the two divisions are:

Cost based transfer price—10,000 units

Boot Division		Sole Division
Selling price of hiking boots	$90	Selling price of sole	$18
Variable cost of manufacturing boot(not including sole)	35	Variable cost per sole	11
Cost of sole purchased from outside suppliers	17