Use the Information Below to Answer the Following Question(s)

question 27

Multiple Choice

Use the information below to answer the following question(s) .The Burnaby Division of Columbia Ltd.produces and sells component parts.Its variable costs per unit are $80 for direct materials, $32 for direct labour and $18 for variable factory overhead.It currently can sell it components on the outside market at a price of $165/unit.Fixed overhead costs are $22 per unit based on a denominator volume of 180,000 units.
-The Surrey Division of Columbia Ltd.has approached the Burnaby Division and requested that it supply 25,000 units of the component at a transfer price of $150.Assuming Burnaby Division has idle capacity, what is the transfer price the Burnaby Division should agree to accept?

• A)$165
• B)$150
• C)$152
• D)$130
• E)$118

---

Definitions:

Marketing Strategy

A company's comprehensive plan for promoting and selling its products or services, combining market research, product development, promotion, and distribution to reach its target market effectively.

Environmentalism

A social and political movement that seeks to protect and improve the health of the environment through advocacy, education, and action.

Preserving

The process of maintaining or keeping something in its original state or in good condition over time.

Restoring

The process of bringing something back to its original condition or state, often applied to antiques, artworks, ecosystems, and historical buildings.