The Engine Division Provides Engines for the Final Assembly Division

question 18

Multiple Choice

The Engine Division provides engines for the Final Assembly Division of a company. The standard unit costs for the Engine Division are as follows: $\begin{array} { l } \text {Direct materials }&\$600\\ \text { Direct labor}&1,200\\ \text {Variable overhead }&300\\ \text {Fixed overhead }&150\\ \text { Market price per unit}&2,730\\\end{array}$
What is the transfer price based on variable product costs plus a fixed fee of $210?

• A)$210
• B)$1,800
• C)$2,100
• D)$2,310

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Definitions:

ICD

International Classification of Diseases, a system of codes used for classifying diagnoses, symptoms, and procedures.

Upcoding

The fraudulent practice of using billing codes that indicate a more expensive service was performed than was actually provided, to increase reimbursement from Medicare or insurance.

Increased Revenue

An upward trend in the amount of money generated from the sales of goods or services within a company.

Serious Fines

Substantial monetary penalties imposed as punishment for severe violations of laws or regulations.