Division X supplies partially completed units of product to division Y.The divisions negotiated a price of $30 plus 20% per unit.Assuming Division X completed and transferred 5,000 units to division Y,the total transfer price on this transaction is:
A)$180,000.
B)$120,000.
C)$150,000.
D)$5,000.

Question

Quizplus · Accepted Answer

The transfer price per unit is $30 plus 20% of $30, which is $30 + $6 = $36. For 5,000 units, the total transfer price is 5,000 units * $36/unit = $180,000.

Division X Supplies Partially Completed Units of Product to Division