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Question 17 (1 point) X Company has two divisions, Fabricating and Assembly. The Fabricating Division transfers partially completed components to the Assembly Division at a
Question 17 (1 point) X Company has two divisions, Fabricating and Assembly. The Fabricating Division transfers partially completed components to the Assembly Division at a predetermined transfer price. The Fabricating Division's standard variable production cost is $200 per unit. Its full cost (variable cost plus allocated fixed overhead) to produce the component is $300 per unit. The Assembly Department can fill a special order for $350 per unit after incurring an additional cost of $60 per unit. The company uses the general transfer-pricing rule. The Fabricating Division has excess capacity. Check the box next to any of the following statements that is a true statement. Under the approach used by this company, the transfer price is $300. The manager of the Assembly Division would accept the special order because the Dvision would show a profit (Selling price of $350 per unit minus a total cost of $260 per unit.) 0 X Company's goal of increasing its profits is furthered if the manager of the Assembly Division accepts the special order
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