Planet Company had the following historical accounting data per unit: Direct materials $70 Direct labor 40 Variable
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Question:
Planet Company had the following historical accounting data per unit:
Direct materials | $70 |
Direct labor | 40 |
Variable overhead | 20 |
Fixed overhead | 30 |
Variable selling expenses | 50 |
Fixed selling expenses | 12 |
The units are normally transferred internally from Division A to Division B. The units also may be sold externally for $220 per unit. The minimum profit level accepted by the company is a markup of 35%. There were no beginning or ending inventories.
What would be the transfer price if Division A uses full cost plus markup?
a). $129
b). $198
c). $136
d). $216
Related Book For
Introduction to Management Accounting
ISBN: 978-0133058789
16th edition
Authors: Charles Horngren, Gary Sundem, Jeff Schatzberg, Dave Burgsta
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