The High Division of Para Company produces a high quality kite.

Unit production costs (based on capacity production of 100,000

units per year) follow:

Direct materials

P

60

Direct labor

25

Overhead (20% variable)

15

Other information

Sales price

120

Selling expenses (15% variable)

20

The High Division is producing and selling at capacity.

What is the minimum selling price that the division would consider

as a "transfer price" to the Recreation Division on which no variable

period costs would be incurred?

A.

P120

C.

P

91

B.

P

88

D

.

P117