Rags-To-Riches Corporation Has Two Divisions, X and Y

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: Direct materials $ 4 per unit
Direct labor 2 per unit
Variable overhead 5 per unit
Fixed overhead 3 per unit
Total $14 per unit
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