If Capacity Constraints Prevent a Segment from Meeting Internal and External

question 112

Multiple Choice

If capacity constraints prevent a segment from meeting internal and external demand for a product,the opportunity cost of selling internally equals ________.

• A) the variable cost of producing the product
• B) the controllable costs of producing the product
• C) the contribution margin the producing segment could have received from selling in the external market rather than the internal market
• D) the variable cost plus the avoidable fixed cost of producing the product

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