The Alpha Division of a company,which is operating at capacity,produces and sells 1,000 units of a certain electronic component in a perfectly competitive market.Revenue and cost data are as follows: (CIA adapted)
$$\begin{array} { | l | r | }
\text { Sales } & \$ 50,000 \
\hline \text { Variable costs } & 34,000 \
\hline \text { Fixed costs } & 12,000 \
\hline
\end{array}$$The minimum transfer price that should be charged to the Beta Division of the same company for each component is:
A) $12.
B) $34.
C) $46.
D) $50.

Question

The Alpha Division of a company,which is operating at capacity,produces and sells 1,000 units of a certain electronic component in a perfectly competitive market.Revenue and cost data are as follows: (CIA adapted) 
$$\begin{array} { | l | r | } 
\text { Sales } & \$ 50,000 \
\hline \text { Variable costs } & 34,000 \
\hline \text { Fixed costs } & 12,000 \
\hline
\end{array}$$The minimum transfer price that should be charged to the Beta Division of the same company for each component is:
A) $12.
B) $34.
C) $46.
D) $50.

Quizplus · Accepted Answer

The Answer of The Alpha Division of a company,which is operating at capacity,produces and sells 1,000 units of a certain electronic component in a perfectly competitive market.Revenue and cost data are as follows: (CIA adapted) 
$$\begin{array} { | l | r | } 
\text { Sales } & \$ 50,000 \
\hline \text { Variable costs } & 34,000 \
\hline \text { Fixed costs } & 12,000 \
\hline
\end{array}$$The minimum transfer price that should be charged to the Beta Division of the same company for each component is:
A) $12.
B) $34.
C) $46.
D) $50.

The Alpha Division of a Company,which Is Operating at Capacity,produces