Figure 20-5
Allied Industries Has Two Divisions: the Bradley Division

question 28

Multiple Choice

Figure 20-5
Allied Industries has two divisions: the Bradley Division and the Rommel Division. Information about the component that the Bradley Division produces is as follows: $\begin{array}{lr}\text { Sales } & £ 180 \text { per unit } \\\text { Variable manufacturing costs } & £ 80 \text { per unit } \\\text { Fixed manufacturing overhead } & £ 50 \text { per unit } \\\text { Expected sales in units } & 10,000 \text { units }\end{array}$ The Bradley Division can produce up to 12,000 components per year. The Rommel Division needs 800 units of the component for a product it manufactures.
-Refer to Figure 20-5. The minimum transfer price that the Bradley Division would be willing to accept is

• A)£50.
• B)£80.
• C)£130.
• D)£180.

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