Division A has variable manufacturing costs of $50 per unit and fixed costs of $10 per unit. Assuming that Division A is operating significantly below capacity, what is the optimal transfer price of an internal transfer when the market price is $75?
A) $20.
B) $25.
C) $50.
D) $60.

Question

Quizplus · Accepted Answer

The Answer of Division A has variable manufacturing costs of $50 per unit and fixed costs of $10 per unit. Assuming that Division A is operating significantly below capacity, what is the optimal transfer price of an internal transfer when the market price is $75?
A) $20.
B) $25.
C) $50.
D) $60.

Division a Has Variable Manufacturing Costs of $50 Per Unit