Figure 20-8
Pautner Company Had the Following Historical Accounting Data

question 1

Multiple Choice

Figure 20-8
Pautner Company had the following historical accounting data per unit: $\begin{array}{lr}\text { Direct materials } & £ 60 \\\text { Direct labour } & 30 \\\text { Variable overhead } & 15 \\\text { Fixed overhead } & 24 \\\text { Variable selling expenses } & 45 \\\text { Fixed selling expenses } & 9\end{array}$ The units are normally transferred internally from Division A to Division B. The units also may be sold externally for £210 per unit. The minimum profit level accepted by the company is a markup of 30 per cent. There were no beginning or ending inventories.
-Refer to Figure 20-8. What would be the transfer price if Division X uses full cost plus markup?

• A)£167.70
• B)£198.90
• C)£136.50
• D)£129.00

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Definitions:

Corrected Trial Balance

A list of all the account titles and balances of a company after adjustments and corrections have been made.

Normal Balance

The side (debit or credit) of an account that is typically increased, indicating its usual positive balance in accounting.

Account Type

Refers to classifications made for various financial transactions in accounting, such as assets, liabilities, equity, revenue, and expenses.

Debit And Credit Effects

The accounting actions that increase or decrease accounts in the double-entry bookkeeping system, where debits are entries on the left side and credits are entries on the right.