An Internal Transfer Between Two Divisions Is in the Best

question 76

Multiple Choice

An internal transfer between two divisions is in the best economic interest of the entire organization when:

• A) the variable costs plus the opportunity cost of the selling division is greater than the external price for the buying division.
• B) the variable costs plus the opportunity cost of the selling division is less than the external price for the buying division.
• C) there is excess capacity in the buying division with no alternative use.
• D) there is no established market prices for the buying division.

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Definitions:

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Novel or inventive ideas proposed to solve problems or improve a situation.

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