The Engine Division Provides Diesel Engines for the Motor Home

Multiple Choice

The Engine Division provides diesel engines for the Motor Home Division of a company. The standard unit costs for Engine Division are as follows: $\begin{array}{lr}\text { Direct materials } & \$ 600 \\\text { Direct labor } & 1,200 \\\text { Variable overhead } & 300 \\\text { Fixed overhead } & 150 \\\text { Market price per unit } & 2,730\end{array}$ What is the best transfer price to avoid transfer price problems?

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