The Framing Division Provides Frames for the Tractor Division of a Company.The

question 32

Multiple Choice

The Framing Division provides frames for the Tractor Division of a company.The standard unit costs for the Framing Division are as follows: $\begin{array}{llr} \text { Direct materials } &\$800\\ \text { Direct labour } &1,500\\ \text { Variable overhead} &400\\ \text { Fixed overhead } &350\\ \text { Market price per unit } &4,575\\\end{array}$
What is the transfer price based on full cost plus a markup of 20 percent?

• A)$3,240
• B)$3,660
• C)$4,575
• D)$5,490