The Engine Division Provides Engines for the Tractor Division of a Company

The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for Engine Division are as follows:
$$\begin{array} { l r } \text { Direct materals }&\$600 \\\text { Direct labour } & 1,200 \\\text { Variable overhead } & 300 \\\text { Fixed overhead } & 150 \\\text { Market price per unit } & 2,730\end{array}$$
-Refer to the figure.What is the best transfer price to avoid transfer price problems?

A) $600
B) $1,800
C) $2,100
D) $2,730

Correct Answer:

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