The Alpha Division of a Company,which Is Operating at Capacity,produces

question 67

Multiple Choice

The Alpha Division of a company,which is operating at capacity,produces and sells 1,000 units of a certain electronic component in a perfectly competitive market.Revenue and cost data are as follows: (CIA adapted)
$$\begin{array} { | l | r | } \text { Sales } & \$ 50,000 \\\hline \text { Variable costs } & 34,000 \\\hline \text { Fixed costs } & 12,000 \\\hline\end{array}$$ The minimum transfer price that should be charged to the Beta Division of the same company for each component is:

• A) $12.
• B) $34.
• C) $46.
• D) $50.

---

Definitions:

Owners

Individuals or entities that hold legal rights and ownership of a company or property.

Measurement

The process of determining the size, length, or amount of something, typically using standard units.

Parcel Of Land

A specific piece of land identified for purposes of sale, lease, or development.

Tax Purposes

For tax purposes refers to the specific calculations, classifications, and filings done in adherence to tax laws and regulations to determine tax liabilities or refunds.