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(Solved): The Tires division of Car Company makes tires for use in its Assembly division. The Tires division i ...
The Tires division of Car Company makes tires for use in its Assembly division. The Tires division incurs variable costs of
$268per set of tires and has the capacity to make
1,180,000sets of tires per year. The market price for tires is
$490per set. The Tires division incurs total fixed costs of
$6,180,000per year. If the Tires division is operating at full capacity, what transfer price should be used on the transfers between the Tires and Assembly divisions? Multiple Choice $268
$490
$273$222
$495