Money Corporation Has Two Divisions,X and Y What Is the Transfer Price for Division X Based on Product

question 110

Multiple Choice

Money Corporation has two divisions,X and Y.Division X sells its product to Division Y.Standard costs for Division X are as follows: $\begin{array}{llcc} \text {Direct materials } & \text {\( \$ 4 \) per unit } \\ \text { Direct labour} & \text {2 per unit } \\ \text { Variable overhead } & \text { 5 per unit } \\ \text { Fixed overhead } & \text { 3 per unit } \\ \text {Total } & \text { \$14 per unit} \\\end{array}$
What is the transfer price for Division X based on standard variable cost plus a markup of 25 percent?

• A)$7.50
• B)$11.00
• C)$13.75
• D)$17.50