The Opportunity Cost Approach to Setting a Transfer Price Would

question 43

Multiple Choice

The opportunity cost approach to setting a transfer price would set the minimum transfer price as

• A)the opportunity cost of the firm as a whole.
• B)the opportunity cost of the selling division.
• C)the opportunity cost of the buying division.
• D)none of the above.

---

Definitions:

Temperature

A measure of the average kinetic energy of the particles in a system, which determines how hot or cold something feels.

Deformation

involves the alteration of the shape or size of rocks and geological structures due to stress and pressure over time.

Subsidence

the gradual sinking of land or a structure, often due to natural underground processes.

Uplift

The vertical elevation of the Earth's surface due to natural causes, such as tectonic movements or volcanic activity.