Clarke Company records reveal the following: $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Division } X$
$\begin{array}{ll}
\begin{array}{l}
\text { Market price of finished comp onent to } \
\text { outsiders }
\end{array} & \$ 32 \
\text { V ariable costs per component }& \underline{24} \
\text { Contribution margin per comp onent } & \underline{\$ 8}\
\text { Total contribution for } 20,000 \text { comp onents } & \underline{\$ 160,000}
\end{array}$
The variable costs of Division Y will be incurred whether it buys from Division X or from an outside supplier. If Division X is working at full capacity, the lowest transfer price it would be willing to accept from Division Y would be:
A) $32
B) $22
C) $24
D) $8

Question

Clarke Company records reveal the following:  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Division } X$
$\begin{array}{ll}
\begin{array}{l}
\text { Market price of finished comp onent to } \
\text { outsiders }
\end{array} & \$ 32 \
\text { V ariable costs per component }& \underline{24}  \
\text { Contribution margin per comp onent } & \underline{\$ 8}\
\text { Total contribution for } 20,000 \text { comp onents } & \underline{\$ 160,000}
\end{array}$
  The variable costs of Division Y will be incurred whether it buys from Division X or from an outside supplier. If Division X is working at full capacity, the lowest transfer price it would be willing to accept from Division Y would be:
A) $32 
B) $22 
C) $24 
D) $8

Quizplus · Accepted Answer

The Answer of Clarke Company records reveal the following:  $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $ $\quad $$\text { Division } X$
$\begin{array}{ll}
\begin{array}{l}
\text { Market price of finished comp onent to } \
\text { outsiders }
\end{array} & \$ 32 \
\text { V ariable costs per component }& \underline{24}  \
\text { Contribution margin per comp onent } & \underline{\$ 8}\
\text { Total contribution for } 20,000 \text { comp onents } & \underline{\$ 160,000}
\end{array}$
  The variable costs of Division Y will be incurred whether it buys from Division X or from an outside supplier. If Division X is working at full capacity, the lowest transfer price it would be willing to accept from Division Y would be:
A) $32 
B) $22 
C) $24 
D) $8

Clarke Company Records Reveal the Following \quad \quad \quad

Clarke Company Records Reveal the Following $\quad$ $\quad$ $\quad$