Rags-To-Riches Corporation Has Two Divisions, X and Y What Is the Transfer Price for Division X Based on Sells

Multiple Choice

Rags-to-Riches Corporation has two divisions, X and Y. Division X sells its product to Division Y. Standard costs for Division X are as follows: $\begin{array}{lr}\text { Direct materials } & \$ 4 \text { per unit } \\\text { Direct labor } & 2 \text { per unit } \\\text { Variable overhead } & 5 \text { per unit } \\\text { Fixed overhead } & 3 \text { per unit } \\\text { Total } & \$ 14 \text { per unit }\end{array}$ What is the transfer price for Division X based on standard variable cost plus a markup of 25 percent?

A) $11.00
B) $17.50
C) $13.75
D) $7.50