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Division A has the capacity for making 2851 motors per month and regularly sells 1936 motors each month on the intermediate market at a contribution
Division A has the capacity for making 2851 motors per month and regularly sells 1936 motors each month on the intermediate market at a contribution margin of $60.43 per motor. A sister division, Division B, would like to obtain 1528 motors each month from Division A. In computing a transfer price per motor using the transfer pricing formula, the lost contribution margin per unit portion of the transfer price computation would be:
Select one:
a. $24.24
b. $60.43
c. $36.36
d. $48.49
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