Panther Company Had the Following Historical Accounting Data Per Unit

question 26

Multiple Choice

Panther Company had the following historical accounting data per unit: The units are normally transferred internally from Division A to Division B. The units also may be sold externally for $210 per unit. The minimum profit level accepted by the company is a markup of 30 percent. There were no beginning or ending inventories.
What would be the transfer price if Division X uses full cost plus markup?

• A) $198.90
• B) $167.70
• C) $136.50
• D) $129.00

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Definitions:

Price Floor

A government-imposed limit below which prices cannot fall, often used in agricultural markets.

Equilibrium Price

The price at which the quantity of goods demanded equals the quantity of goods supplied, leading to market stability.

Ineffective

Not producing the intended or desired effect.

Economic Cost

The total cost of choosing one action over another, including both direct costs and any lost opportunity costs.