Engine Division the Engine Division Provides Engines for the Tractor Division of Division

question 19

Multiple Choice

Engine Division
The Engine Division provides engines for the Tractor Division of a company.The standard unit costs for Engine Division are as follows:

Refer to the Engine Department.The division has excess capacity.What is the best transfer price to avoid transfer price problems?

• A)$1,350
• B)$300
• C)$900
• D)$2,100

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Definitions:

Discount

A reduction from the usual cost of something, often applied to prompt payments or for certain groups of people like students or seniors.

Issue Price

The price at which new securities are offered to the public by an issuer.

Present Value

Today's value of a future financial sum or series of payments, calculated with a certain return rate.

Market Rate

The current price or interest rate of goods, services, or securities in the marketplace, determined by supply and demand forces.