WAX-D Inc Has a Division That Manufactures a Component That Sells

question 35

Multiple Choice

WAX-D Inc. has a division that manufactures a component that sells for $150 and has a variable cost of $45. Another division of the company wants to purchase the component. Fixed cost per unit of component is $25. What is the minimum transfer price if the division is operating below its capacity?

• A)$50
• B)$45
• C)$30
• D)$40

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