Raphael,Inc.has a division that manufactures a component that sells for $190 and has a variable cost of $35.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $22.What is the minimum transfer price if the division is operating below its capacity?
A)$190
B)$35
C)$57
D)$22

Question

Quizplus · Accepted Answer

The minimum transfer price when operating below capacity is the variable cost, which is $35.