Division R sells one of its products to division S in the same group. The...
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Accounting
Division R sells one of its products to division S in the same group. The product cost consists of $160 for materials, $60 for direct labour, $10 for variable overhead and $110 for fixed overhead. R division sets its profit margin equal to 40% of the variable cost. What is the ideal transfer price if R is operating at less than full capacity?
Select one:
a. $230
b. $160
c. $432
d. $340
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