Use the Following Information for Questions

question 29

Multiple Choice

Use the following information for questions
The Selling Division's unit sales price is $25 and its unit variable cost is $15. Its capacity is 10,000 units. Fixed costs per unit are $6. Current outside sales are 8,000 units.
-What is the Selling Division's opportunity cost per unit from selling 3,000 units to the Purchasing Division?

• A) $10
• B) $25
• C) $4
• D) $0

---

Definitions:

Weighted-Average Method

A technique that figures out the cost of sold goods and the finishing inventory value, by averaging the cost of all items up for sale.

Labour and Overhead

Combined costs of workforce (both direct and indirect labor) and overhead expenses incurred during production.

Blending Department

A division within a manufacturing operation where raw materials are combined to produce a homogeneous product.

Weighted-Average Method

An inventory costing method that calculates the cost of goods sold and ending inventory based on the average cost of all units available for sale.