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Division A has the capacity for making 2869 motors per month and regularly sells 1964...

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Accounting

Division A has the capacity for making 2869 motors per month and regularly sells 1964 motors each month on the intermediate market at a contribution margin of $61.32 per motor. A sister division, Division B, would like to obtain 1417 motors each month from Division A. In computing a transfer price per motor using the transfer pricing formula, the lost contribution margin per unit portion of the transfer price computation would be:

Select one:

a. $61.32

b. $44.31

c. $33.23

d. $22.16

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