Accounting · Management Accounting
Division Sell is operating at full capacity producing component XBD2 which it sells externally for $8.00 per unit. The variable cost of production is $5 per unit. Another internal division, Division Buy, is negotiating a transfer price for purchasing component XBD2 from Division Sell. Because of saved transport costs, the variable cost of producing component XBD2 for Division Buy would be $4.50 per unit. What is the minimum transfer price that Division Sell should accept for transferring component XBD2 to Division Buy?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
Share:
- 1$8.00 per unit
- 2$7.50 per unit✓
- 3$5.00 per unit
- 4$4.50 per unit
Correct answer
$7.50 per unit
Download Single Question PDF
Save this question and verified answer as a clean study sheet with live clickable link.
👥
Share with Friends & Study Groups
Challenge your peer aspirants on WhatsApp or Telegram to solve this question!
Online Test Series
Start Free Mock Test →Preparing for Accounting?
Practice full-length mock tests with real exam timers, instant score analysis, and all-India ranking.
Chapter Practice
Practice Management Accounting MCQs →Want more practice questions on Management Accounting?
Solve complete topic-wise tests with detailed solutions on GkGet.
Related Practice Questions
Recommended practice questions in Accounting · Management Accounting