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Kitty City Company's Canned Foods Division Has Collected the Following         ~~~~~~~~

Question 147

Multiple Choice

Kitty City Company's Canned Foods division has collected the following information:
Normal selling price         ~~~~~~~~        ~~~~~~~~         ~~~~~ ~~~~        ~~~~~~~~   ~~ ~ $3.90 per can
Variable product costs         ~~~~~~~~        ~~~~~~~~          ~~~~~~~~~~        ~~~~~~~~ 2.20 per can
Fixed product costs .         ~~~~~~~~        ~~~~~~~~       ~~ ~~~~~        ~~~~~~~~      ~~~~ ~ ~ 80 per can
Variable selling and administrative costs .         ~~~~~~~~ 30 per can
Production capacity         ~~~~~~~~        ~~~~~~~~     ~~ ~~~        ~~~~~~~~        ~~~~~~~~ 2,500,000 cans

The Canned Foods division is currently producing 2,000,500 cans.The company's Dinner Pack division wants to buy 350,000 cans.The minimum transfer price would be


A) $1.10
B) $2.50
C) $3.00
D) $3.30

Correct Answer:

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