QUESTION 7

1. The COB Division of Northern Corp. produces and sells a product to outside and internal customers. Per-unit data collected from its operations include:

   Outside sales price	$700
   Direct materials	105
   Direct labour	250
   Fixed overhead	180

   If COB is operating at full capacity and selling solely to outside customers, what price should another division pay for COB's product?

   	A.	$625
   	B.	$700
   	C.	$480
   	D.	$285