In the Formula for the Minimum Transfer Price, Opportunity Cost

question 89

Multiple Choice

In the formula for the minimum transfer price, opportunity cost is the __________ of the goods sold externally.

• A) variable cost
• B) total cost
• C) selling price
• D) contribution margin

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds, reflecting the interest payments on debt over a reporting period.

Note Payable

A written agreement where one party promises to pay another party a definite sum of money either on demand or at a specified future date.

Maturity

The date on which the principal amount of a financial instrument, such as a bond or loan, becomes due and payable.

Non-current Liability

A financial obligation that is not due for settlement within one year or the normal operating cycle of the business, often including long-term loans, bonds payable, and lease obligations.