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The Kelso Division produces and sells a product to external and internal customers. Per-unit information...

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Accounting

The Kelso Division produces and sells a product to external and internal customers. Per-unit information about its operations include:

Selling price per unit to external customers $250

Variable manufacturing costs per unit 115

Fixed manufacturing overhead costs per unit 70

If Kelso has sufficient excess capacity to meet internal demand, what should be the transfer price for Kelsos product?

a) $245

b) $250

c) $115

d) $185

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