Division a Has Variable Manufacturing Costs of $25 Per Unit

question 43

Multiple Choice

Division A has variable manufacturing costs of $25 per unit and fixed costs of $5 per unit. Division A is operating at capacity. What is the opportunity cost of an internal transfer when the market price is $35?

• A) $5.
• B) $10.
• C) $25.
• D) $30.

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Definitions:

Pollution

The presence or introduction into the environment of contaminants that cause harm or discomfort to organisms and the environment.

Government

The organization or system through which a community or nation is governed and regulated.

Market Mechanism

The process by which supply and demand interact to determine the prices and quantities of goods and services in a market economy.

Allocate Goods

The process of distributing resources or products to where they are needed or can be used most effectively.