Raphael,Inc

question 10

Multiple Choice

Raphael,Inc.has a division that manufactures a component that sells for $190 and has a variable cost of $35.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $22.What is the minimum transfer price if the division is operating below its capacity?

• A)$190
• B)$35
• C)$57
• D)$22

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Definitions:

Effective Yield

The return on a bond or investment after adjusting for all charges and fees, as well as compounding.

Investment Balance

Investment balance refers to the current value of an investor's portfolio, taking into account all the assets held, including stocks, bonds, and other investments.

Held To Maturity

A classification for financial securities which the holder intends and is able to keep until they mature.

Effective Yield

A measure of the return on an investment, accounting for the effect of compounding interest more accurately than nominal yield.