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

question 107

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 maximum transfer price if the division is operating below its capacity?

• A)$70
• B)$170
• C)$150
• D)$30

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Definitions:

Microfinance

The provision of small loans and other financial services to low-income entrepreneurs and small-business owners in developing countries.

Microcredit

Small loans given to entrepreneurs in developing countries as a way to foster economic development and alleviate poverty.

Entrepreneurs

Individuals who initiate, manage, and take on the risks of a business or enterprise, often bringing innovation to the market.

Microcredit

Refers to the provision of small loans to individuals in impoverished countries or regions to promote entrepreneurship and alleviate poverty.