The Optimal Transfer Price from the Viewpoint of the Company

question 33

Multiple Choice

The optimal transfer price from the viewpoint of the company is

• A)variable cost.
• B)absorption cost plus markup.
• C)variable cost plus opportunity cost.
• D)absorption cost plus selling expenses.

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Definitions:

Selling Price

The cost at which a good or service is made available for purchase to consumers.

Traceable Fixed Expense

Fixed costs that can be directly linked to a specific business segment or product line.

Net Operating Income

The profit a company makes from its operations, exclusive of taxes and other non-operational expenses.

Price Hike

An increase in the selling price of goods or services, often due to increased production costs or higher demand.