What is the minimum transfer price for the 25,000 unit order that Division A would accept if it wishes to maintain its pre-order contribution?
A)$3.50
B)$4.00
C)$4.80
D)$6.00

Question

Quizplus · Accepted Answer

The minimum transfer price should cover the variable cost per unit to maintain the pre-order contribution. If $4.80 is the variable cost, then Division A would accept this as the minimum transfer price.

What Is the Minimum Transfer Price for the 25,000 Unit