Holiday Corporation has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $4.30 per widget while the full cost is $7.30. Widgets sell on the open market for $12.60 each. If Quail has excess capacity, what would be the minimum transfer price if Marlin currently is purchasing 115,000 units on the open market?   Multiple Choice   $5.30   $4.30   $12.60   $7.30

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Holiday Corporation has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $4.30 per widget while the full cost is $7.30. Widgets sell on the open market for $12.60 each. If Quail has excess capacity, what would be the minimum transfer price if Marlin currently is purchasing 115,000 units on the open market?

 

Multiple Choice
  •  

    $5.30

  •  

    $4.30

  •  

    $12.60

  •  

    $7.30

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