WAX-D Inc.has a division that manufactures a component that sells for $150 and has a variable cost of $45.Another division of the company wants to purchase the component.Fixed cost per unit of component is $25.What is the minimum transfer price if the division is operating below its capacity?
A)$50
B)$45
C)$70
D)$40

Question

Quizplus · Accepted Answer

The minimum transfer price when operating below capacity is the variable cost, which is $45.

WAX-D Inchas a Division That Manufactures a Component That Sells for for $150