Atom,Inchas a Division That Manufactures a Component That Sells for $160

question 189

Multiple Choice

Atom,Inc.has a division that manufactures a component that sells for $160 and has a variable cost of $50.Another division of the company wants to purchase the component.Fixed cost per unit of the component is $20.What is the minimum transfer price if the division is operating at capacity?

• A) $160
• B) $50
• C) $70
• D) $20

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Definitions:

Dexron

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A record within the Engine Control Unit (ECU) that lists errors and malfunctions detected in a vehicle's systems.