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Boom Division of Avatar Corporation produces and sells aircraft parts. Its variablo costs per unit are $75 for direct materials. $15 for direct labour and
Boom Division of Avatar Corporation produces and sells aircraft parts. Its variablo costs per unit are $75 for direct materials. $15 for direct labour and S10 for variable manufacturing overhead. It currently can sell it parts on the outside market at a price of $140 per unit. Foed overhead costs are $8 per unit based on a denominator volume of 180,000 units The Crunch Division of Avatar Corporation has approached the Boom Division and requested that it supply 25,000 units of the aircraft parts at a transfer price of $120. Assuming Boom Division has idle capacity, what is the transfer price the Boom Division should agree to accopl? A. $140 B. $130 OC. $120 D. $150 O E. $100
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