Use the following information for the next 2 questions.
The National Division of Roboto Company is buying 10,000 widgets from an outside supplier at $30 per unit. Roboto's Overseas Division, which is producing and selling at full capacity (12,000 units), has the following sales and cost structure:
-If the National Division buys its 10,000 widgets from the Overseas Division, the transfer price should be
A) $45.00
B) $30.00
C) $22.50
D) $37.50

Question

Use the following information for the next 2 questions.
The National Division of Roboto Company is buying 10,000 widgets from an outside supplier at $30 per unit. Roboto's Overseas Division, which is producing and selling at full capacity (12,000 units), has the following sales and cost structure: 
-If the National Division buys its 10,000 widgets from the Overseas Division, the transfer price should be
A) $45.00 
B) $30.00 
C) $22.50 
D) $37.50

Quizplus · Accepted Answer

The transfer price should be $45.00 because it is the price that the National Division would have to pay if it bought the widgets from an outside supplier.

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