Pautner Company had the following historical accounting data per unit: $60 30 15

Question

Pautner Company had the following historical accounting data per unit:

$60

30

15

24

45

9

The units are normally transferred internally from Division A to Division B. The units also may be sold externally for $210 per unit. The minimum profit level accepted by the company is a markup of 30 percent. There were no beginning or ending inventories.

What would be the transfer price if Division X uses full cost plus markup?

$167.70

$198.90

$136.50

$129.00

Direct materials

$60

Direct labor

30

Variable overhead

15

Fixed overhead

24

Variable selling expenses

45

Fixed selling expenses

9

Explanation / Answer

I think that $167.70

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