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

question 20

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. The Engine Division has excess capacity.What is the best transfer price to avoid transfer price problems?

• A)$300
• B)$900
• C)$1,350
• D)$2,100

---

Definitions:

Diseases

Conditions that impair normal body functions and are characterized by specific symptoms and signs.

Quantity

The quantity of a substance or abstract item that does not need a measurement unit to be quantified.

Quality

An attribute or characteristic that determines the degree of excellence or superiority of something.

Quantity

A property that describes the numerical extent or amount of something.