H Group has two divisions, Division P and Division Q. Division P manufactures an item that is transferred to Division Q. The item has no external market and 6000 units produced are transferred internally each year. The costs of each division are as follows?Division P - Division QVariable Cost 100 per unit 120 per unitFixed cost each year 1,20,000 90,000Head Office management decided that a transfer price should be set that provides a profit of 30,000 to Division P. What should be the transfer price per unit?

Syllabus (with weightage)
A. Cost Management 20%
B. Strategic Cost Management Tools and Techniques 50%
C. Strategic Cost Management - Application of Statistical Techniques in Business Decisions 30%

Related Test: CMA Intermediate Exam: Cost and Management Accounting