Timekeeper Corporation Has Two Divisions, Distribution and Manufacturing

question 56

Multiple Choice

Timekeeper Corporation has two divisions, Distribution and Manufacturing. The company's primary product is high-end watches. Each division's costs are provided below:

The Distribution Division has been operating at a capacity of 4,009,000 units a week and usually purchases 2,004,500 units from the Manufacturing Division and 2,004,500 units from other suppliers at $10.00 per unit.
What is the transfer price per watch from the Manufacturing Division to the Distribution Division, assuming the method used to place a value on each watch is 170% of variable costs?

• A) $1.87
• B) $3.18
• C) $3.19
• D) $8.13

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Definitions:

Defibrillator

A device that delivers an electric shock to the heart to restore a normal rhythm in cases of cardiac arrest.

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Terminal Punctuation

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Terminal Punctuation

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