Figure 12-3 Quinn Has Capacity to Make 950,000 Zippers Per Year, but \\
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question 39

Multiple Choice

Figure 12-3 $\begin{array}{ll}\text { Direct materials } & \$ 0.23 \\\text { Direct labor } & \$ 0.20 \\\text { Variable overhead } & \$ 0.95 \\\text { Fixed overhead } & \$ 1.32 \\\text { Total } & \$ 2.70\end{array}$ Quinn has capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year. LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives) .
-Refer to Figure 12-4. Assume that Style and LeatherStuff have agreed on a transfer price of $3.25. What is the total benefit for Quinn, Inc.?

• A) $22,500
• B) $292,500
• C) $163,000
• D) $169,000
• E) $190,800

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