Division A has variable manufacturing costs of $50 per unit and fixed costs of $10 per unit.Assuming that Division A is operating at capacity,what is the optimal transfer price of an internal transfer when the market price is $75?
A)$20.
B)$25.
C)$50.
D)$60.
E)$75.

Question

Quizplus · Accepted Answer

The optimal transfer price when operating at capacity is the market price, which is $75.

Division a Has Variable Manufacturing Costs of $50 Per Unit