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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
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
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