MC Qu. 4 When the selling division in an internal tra... When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred, then the lowest acceptable transfer price as far as the selling division is concerned is: Multiple Choice the market price charged to outside customers, less costs saved by transferring internally. the amount that the purchasing division would have to pay an outside seller to acquire a similar product for its use. the full absorption cost of producing a unit of product. variable cost of producing a unit of product.

Bandar industries berhad of malaysia manufactures sporting equipment. one of the company’s products, a football helmet for the north american market, requires a special plastic. during the quarter ending june 30, the company manufactured 35,000 helmets, using 22,500 kilograms of plastic. the plastic cost the company $171,000. according to the standard cost card, each helmet should require 0.6 kilograms of plastic, at a cost of $8 per kilogram. 1. what is the standard quantity of kilograms of plastic (sq) that is allowed to make 35,000 helmets? 2. what is the standard materials cost allowed (sq x sp) to make 35,000 helmets? 3. what is the materials spending variance? 4. what is the materials price variance and the materials quantity variance?