Which of the Following Denotes Minimum Transfer Price

question 40

Multiple Choice

Which of the following denotes minimum transfer price?

• A) Minimum transfer price = Incremental cost per unit incurred up to the point of transfer + Opportunity cost per unit to the selling subunit
• B) Minimum transfer price = Total cost per unit incurred up to the point of transfer + Sunk cost per unit to the selling subunit
• C) Minimum transfer price = Current cost per unit incurred up to the point of transfer + Historical cost per unit to the selling subunit
• D) Minimum transfer price = Variable cost per unit incurred up to the point of transfer + Fixed cost per unit to the selling subunit

---

Definitions:

Nonlabor Income

Refers to earnings that do not come from employment or work performed but from other sources such as investments, pensions, or inheritance.

Wage Rate

the standard amount of compensation given for labor services per unit of time, often expressed per hour or year.

Lump Sum Payment

A single payment made at a particular time, as opposed to multiple payments over time, often used in contexts like settlements or pensions.

Labor Income

Earnings derived from work or employment, including wages, salaries, commissions, and bonuses.