Colorado Furniture had the following historical accounting data, per hundred board feet, concerning one of its products: The shelving is normally transferred internally from the Cutting Division to the Finishing Division.It also may be sold externally for $110 per hundred board feet.The minimum profit level accepted by the company is a markup of 20 percent.
If the negotiated price is used, Colorado Furniture's transfer price should be a
A) maximum of $100.80.
B) minimum of $84.00.
C) maximum of $110.00.
D) minimum of $80.00.

Question

Colorado Furniture had the following historical accounting data, per hundred board feet, concerning one of its products:  The shelving is normally transferred internally from the Cutting Division to the Finishing Division.It also may be sold externally for $110 per hundred board feet.The minimum profit level accepted by the company is a markup of 20 percent.
If the negotiated price is used, Colorado Furniture's transfer price should be a
A) maximum of $100.80. 
B) minimum of $84.00. 
C) maximum of $110.00. 
D) minimum of $80.00.

Quizplus · Accepted Answer

The Answer of Colorado Furniture had the following historical accounting data, per hundred board feet, concerning one of its products:  The shelving is normally transferred internally from the Cutting Division to the Finishing Division.It also may be sold externally for $110 per hundred board feet.The minimum profit level accepted by the company is a markup of 20 percent.
If the negotiated price is used, Colorado Furniture's transfer price should be a
A) maximum of $100.80. 
B) minimum of $84.00. 
C) maximum of $110.00. 
D) minimum of $80.00.

Colorado Furniture Had the Following Historical Accounting Data, Per Hundred