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

Multiple Choice

The Engine Division provides engines for the Truck Division of a company. The standard unit costs for the Engine Division are as follows: $\begin{array} { l } \text {Direct materials }&\$600\\ \text { Direct labor}&1,200\\ \text {Variable overhead }&300\\ \text {Fixed overhead }&150\\ \text { Market price per unit}&2,730\\\end{array}$
What is the transfer price based on full cost plus a markup of 30 percent?

A) $585
B) $2,925
C) $2,760
D) $2,730