Chute Company's Extract Division Has Collected the Following Information:
Normal $~~~~~~~~$

question 111

Multiple Choice

Chute Company's Extract division has collected the following information:
Normal selling price $~~~~~~~~$$~~~~~~~~$$~~~~~~~~~~$$~~~~~~~~$ $2.90 per bottle
Variable product costs $~~~~~~~~$$~~~~~~~~$$~~~~~~~~~$$~~~~~~~~$ 1.25 per bottle
Fixed product costs . $~~~~~~~~$$~~~~ ~~$$~~~~~~~~$$~~~~~~~~$$~~ ~~~~$ 50 per bottle
Variable selling and administrative costs . $~~~~~~~~$ 25 per bottle
Production capacity $~~~~~~~~$$~~~~ ~~$$~~~~~~~~$$~~ ~~~~~$$~~~~~~~~$ 1,500,000 bottles
Assuming that the division has excess capacity of 300,000 and the Baked Goods division wants to buy 250,000 bottles,the minimum transfer price would be

• A) $2.90
• B) $2.00
• C) $1.50
• D) $1.15

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Definitions:

Usurious Loan

A loan given with illegally high-interest rates.

Legal Effect

The legal consequence or outcome that arises from the execution of a law, contract, agreement, or judicial decision.

State

A distinct entity in a federal system that has its own government and borders within a larger country.

Injunction

A court order compelling an individual or entity to do or refrain from doing a specific act, used as a remedy to prevent harm or protect rights.