The Eastern Division Sells Goods Internally to the Western Division

The Eastern Division sells goods internally to the Western Division at Tennessee Company.The quoted external price in industry publications from a supplier near Eastern is $200 per ton plus transportation.It costs $20 per ton to transport the goods to Western.Eastern's actual market cost per ton to buy the direct materials to make the transferred product is $100.Actual per-ton direct labor is $50.Other actual costs of storage and handling are $40.Tennessee Company's president selects a $220 transfer price.This is an example of: (CIA adapted)

A) market-based transfer pricing.
B) cost-based transfer pricing.
C) negotiated transfer pricing.
D) cost plus 20% transfer pricing.