The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are as follows: $\begin{array} { l }
\text {Direct materials }&\$600\
\text {Direct labor }&1,200\
\text { Variable overhead}&300\
\text {Fixed overhead }&150\
\text { Market price per unit}&2,730\
\end{array}$
What is the transfer price based on variable product costs plus 20 percent?
A)$720
B)$2,160
C)$2,100
D)$2,520

Question

The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are as follows: $\begin{array} { l  }
 \text {Direct materials }&\$600\
 \text {Direct labor }&1,200\
 \text { Variable overhead}&300\
 \text {Fixed overhead }&150\
 \text { Market price per unit}&2,730\
\end{array}$
 What is the transfer price based on variable product costs plus 20 percent?
A)$720
B)$2,160
C)$2,100
D)$2,520

Quizplus · Accepted Answer

The Answer of The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are as follows: $\begin{array} { l  }
 \text {Direct materials }&\$600\
 \text {Direct labor }&1,200\
 \text { Variable overhead}&300\
 \text {Fixed overhead }&150\
 \text { Market price per unit}&2,730\
\end{array}$
 What is the transfer price based on variable product costs plus 20 percent?
A)$720
B)$2,160
C)$2,100
D)$2,520

The Engine Division Provides Engines for the Tractor Division of a Company