Mazuka,Inc

question 29

Multiple Choice

Mazuka,Inc.has a division that manufactures a component that sells for $165 and has a variable cost of $35.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $22.What is the transfer price if the division is operating at full capacity?

• A) $57
• B) $187
• C) $165
• D) $22

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Definitions:

Coupon Rate

The interest rate that an issuer of a bond pays to a holder, expressed as a percentage of the bond's face value, paid regularly until maturity.

Yield To Maturity

The total return anticipated on a bond if it is held until the date it matures, considering all interest payments and the principal repayment.

Semi-Annually

Occurring or done twice a year, typically every six months.

Face Value

The nominal or dollar value stated on a security or financial instrument, such as a bond or stock, representing its worth at issuance or par value.