Management of the Catering Company would like the Food Division to transfer 10,000 cans of its final product to the Restaurant Division for $30. The Food Division sells the product to customers for $70 per unit. The Food Division's variable cost per unit is $35 and its fixed cost per unit is $10.
If the Food Division has 10,000 units available capacity, what is the minimum transfer price the Food Division should accept?
a) $35
b) $70
c) $45
d) $30
Answer: a) $35
Business
You might also like to view...
Which of these would be the best example of a limited pay life insurance policy?
A) Whole life policy that pays out its cash value over a 20 year period B) Whole life policy with premiums paid up after 20 years C) Term life policy that returns cash value after 20 years D) Term life policy with premiums paid up after 20 years
Business
One reason to conduct causal research is to determine the degree to which marketing variables are associated. For example, to what extent is shopping at department stores related to eating out?
Indicate whether the statement is true or false
Business