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

question 73

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 variable product costs plus a fixed fee of $210?

• A)$210
• B)$1,800
• C)$2,100
• D)$2,310

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Definitions:

Exercise Price

The specified price at which an option's holder can buy (call option) or sell (put option) the underlying security or commodity.

Stock Price

The cost of purchasing a share of a company's stock on the open market, dictated by supply and demand dynamics.

Intrinsic Value

The actual, inherent value of an asset, determined through fundamental analysis without reference to its market value.

Call Option

A financial contract granting the buyer the right to buy an asset at a specified price before a set date.