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:

UCC

Stands for Uniform Commercial Code, which is a comprehensive set of laws governing all commercial transactions in the United States.

Anglo-American Law

A legal system originating in England and now prevalent in the United States and many Commonwealth countries, characterized by the doctrine of precedent.

Currency Substitute

Any means of payment used in lieu of traditional money (coins and banknotes) for the transaction of goods and services.

Enforceable Contract

An agreement between parties that is legally binding and can be upheld in a court of law.