Timekeeper Corporation Has Two Divisions,Distribution and Manufacturing

question 10

Multiple Choice

Timekeeper Corporation has two divisions,Distribution and Manufacturing.The company's primary product is high-end watches.Each division's costs are provided below:

The Distribution Division has been operating at a capacity of 4,009,000 units a week and usually purchases 2,004,500 units from the Manufacturing Division and 2,004,500 units from other suppliers at $10.00 per unit.
What is the transfer price per watch from the Manufacturing Division to the Distribution Division,assuming the method used to place a value on each watch is 170% of variable costs?

• A)$1.87
• B)$3.18
• C)$3.19
• D)$8.13

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Definitions:

Altering Weight

Adjusting the mass distribution in a vehicle or system to change its performance or stability characteristics.

No-Slack

This term might refer to a technology or design feature in vehicle components that reduces or eliminates slack or play, ensuring tighter and more precise control.

Fully Oscillating

Describes a mechanism that has the ability to swing or pivot in full range around a fixed point or axis.

High Center

A situation where a vehicle becomes stuck with its center lifted off the ground, preventing wheel traction.