(Appendix 12A)Division 1 of Ace Company Makes and Sells Wheels

question 14

Multiple Choice

(Appendix 12A) Division 1 of Ace Company makes and sells wheels that can either be sold to outside customers or transferred to Division 2.The following data are available from last month: Division 1: Division 2: If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales commissions.
Suppose that Division 1 sells 11, 500 units each month to outside customers.According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

• A)$47.00 per unit
• B)$43.50 per unit
• C)$37.50 per unit
• D)$34.73 per unit

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The practice of developing and maintaining a positive and cooperative relationship between an organization and the news media.

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