The Engine Division Provides Engines for the Tractor Division of a Company

question 97

Multiple Choice

The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for Engine Division are as follows:
$$\begin{array} { l r } \text { Direct materals }&\$600 \\\text { Direct labour } & 1,200 \\\text { Variable overhead } & 300 \\\text { Fixed overhead } & 150 \\\text { Market price per unit } & 2,730\end{array}$$
-Refer to the figure.What is the transfer price based on full cost plus a markup of 30 percent?

• A)$585
• B)$2,730
• C)$2,760
• D)$2,925

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Definitions:

Overload Unit

A protective device used in electrical circuits to prevent motors and other devices from operating at currents that are higher than their safe operating limits.

Electric Motor

A device that converts electrical energy into mechanical energy.

Contactor

A contactor is an electrically controlled switch used for switching an electrical power circuit, typically in industrial applications to control motors and other heavy loads.

Overload Unit

A component in motor starters that protects motors from damage by interrupting power in case of an overload.