Chemical Company has two divisions,the Mixing Division and Bottling Division.The Mixing Division sells chemicals to the Bottling Division.
Standard costs for the Mixing Division are as follows:

The Bottling Division uses the following predetermined overhead rate:

What is the transfer price for the chemicals per gallon based on standard variable cost?
A)$3.00
B)$5.40
C)$9.00
D)$11.40

Question

Chemical Company has two divisions,the Mixing Division and Bottling Division.The Mixing Division sells chemicals to the Bottling Division.
Standard costs for the Mixing Division are as follows:

The Bottling Division uses the following predetermined overhead rate:

What is the transfer price for the chemicals per gallon based on standard variable cost?
A)$3.00 
B)$5.40 
C)$9.00 
D)$11.40

Quizplus · Accepted Answer

The Answer of Chemical Company has two divisions,the Mixing Division and Bottling Division.The Mixing Division sells chemicals to the Bottling Division.
Standard costs for the Mixing Division are as follows:

The Bottling Division uses the following predetermined overhead rate:

What is the transfer price for the chemicals per gallon based on standard variable cost?
A)$3.00 
B)$5.40 
C)$9.00 
D)$11.40

Chemical Company Has Two Divisions,the Mixing Division and Bottling Division