The Kelso Division Produces and Sells a Product to External

question 20

Multiple Choice

The Kelso Division produces and sells a product to external and internal customers. Per-unit information about its operations include: Selling price per unit to external customers $250
Variable manufacturing costs per unit 115
Fixed manufacturing overhead costs per unit 70
If Kelso is operating at capacity and has unlimited external customer demand, what should be the transfer price for Kelso's product?

• A)$245
• B)$250
• C)$115
• D)$185