A Division Can Sell Externally for $40 Per Unit

question 144

Multiple Choice

A division can sell externally for $40 per unit. Its variable manufacturing costs are $15 per unit, and its variable marketing costs are $6 per unit. What is the opportunity cost of transferring internally, assuming the division is operating at capacity?

• A) $15.
• B) $19.
• C) $21.
• D) $25.

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Definitions:

Comity Provision

A principle or legal doctrine that allows for recognition of foreign legal processes, provided they are consistent with local law and values.

National Unity

The sense of solidarity and cohesion among the citizens of a nation, often in pursuit of common goals or under shared identities.

Formally Adopted

Officially accepted or enacted through proper legal or administrative procedures.

Union

An organization formed by workers in various sectors to protect and advance their rights, interests, and working conditions.