The Engine Division provides engines for the Tractor Division of a company. The standard unit costs for the Engine Division are: Direct materials $700 Direct labor 1,300 Variable overhead 400 Fixed overhead 200 Market price per unit 3,200 The Engine Division has excess capacity. What is the best transfer price to avoid transfer price problems?

Secured loans are protected by collateral security. examples: title loans where the borrower uses the car title as collateral security interest rates are lower and repayments are longer therefore risk is low as a collateral security is given as guarantee to the bank in case of failure to pay the loanunsecured loans are not protected by collateral security but it is given on the creditworthiness of the borrower, trusting that she/he will pay on time. examples; payday loans is a short term loan where the borrower lends money from the bank and pays is back when the borrower receives his/her wages.interest rates are high and repayments are shorter. but the risk is high as no collateral security is given as a guarantee to the bank for payment of the loan