Part AR3 Costs the Southwestern Division of Luxon Corporation $26

question 23

Multiple Choice

Part AR3 costs the Southwestern Division of Luxon Corporation $26 to make-direct materials are $10,direct labor is $4,variable manufacturing overhead is $9,and fixed manufacturing overhead is $3.Southwestern Division sells Part AR3 to other companies for $30.The Northeastern Division of Luxon Corporation can use Part AR3 in one of its products.The Southwestern Division has enough idle capacity to produce all of the units of Part AR3 that the Northeastern Division would require.What is the lowest transfer price at which the Southwestern Division should be willing to sell Part AR3 to the Northeastern Division?

• A)$30
• B)$26
• C)$23
• D)$27
• E)$21

---

Definitions:

Herbal Remedies

Natural plant-based products used to prevent, alleviate, or cure diseases and conditions, often part of traditional or alternative medicine practices.

Nutritional Supplements

Products taken orally that contain dietary ingredients intended to supplement the diet, such as vitamins, minerals, herbs, or amino acids.

Complementary

Elements or factors that enhance or improve each other when combined.