A company established a branch to sell automobile seat covers. The company purchases these covers and stores them in a warehouse. The covers are then shipped from the warehouse to both the home office and the new branch, FOB destination. Home office management is responsible for setting the transfer price of the covers charged to the branch. Per-unit costs of the covers are:
According to the general transfer-pricing formula given in the text, the minimum transfer price that home office should charge the branch is:
A) $62.50.
B) $63.50.
C) $66.00.
D) $68.00.
E) $69.00.
Correct Answer:
Verified
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