Kitty City Company's Canned Foods Division Has Collected the Following

question 85

Multiple Choice

Kitty City Company's Canned Foods division has collected the following information: Normal selling price $3.90 per can
Variable product costs 2.20 per can
Fixed product costs .80 per can
Variable selling and administrative costs .30 per can
Production capacity 2,500,000 cans
The Canned Foods division is currently producing 2,000,500 cans.The company's Dinner Pack division wants to buy 350,000 cans.The minimum transfer price would be

• A)$1.10
• B)$2.50
• C)$3.00
• D)$3.30

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Definitions:

Net Working Capital

A measure of a company's short-term financial health, calculated as current assets minus current liabilities.

Sales

The total revenue generated from goods or services sold by a company during a specific period, indicating the company's performance in generating business.

Project Analysis

is the process of evaluating the viability, feasibility, and profitability of a proposed project through various methods including financial analysis, risk assessment, and market research.

Account

A record that keeps track of financial transactions for a specific purpose, such as savings, checking, or investment dealings.