When the Selling Division in an Internal Transfer Has Unsatisfied

question 96

Multiple Choice

When the selling division in an internal transfer has unsatisfied demand from outside customers for the product that is being transferred,then the lowest acceptable transfer price as far as the selling division is concerned is:

• A) the variable cost of producing a unit of product.
• B) the full absorption cost of producing a unit of product.
• C) the market price charged to outside customers,less costs saved by transferring internally.
• D) the amount that the purchasing division would have to pay an outside seller to acquire a similar product for its use.

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Definitions:

Informational Social Influence

The influence to accept information from others as evidence about reality, often leading to conformity.

Deindividuation

A psychological state characterized by decreased self-awareness and diminished social identity, leading to uninhibited and sometimes antisocial behavior.

Social Facilitation

This refers to the improved performance on tasks in the presence of others.

Cheerful

Displaying a happy or lighthearted mood or disposition.