(Appendix 12A)Using the Formula in the Text, If the Lowest

question 2

Multiple Choice

(Appendix 12A) Using the formula in the text, if the lowest acceptable transfer price from the viewpoint of the selling division is $90 and the opportunity cost per unit on outside sales is $40, then the variable cost per unit must be:

• A)$90
• B)$40
• C)$130
• D)$50

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Definitions:

Causal Relationship

When one variable causes a change in another variable.

Explanatory Variables

Variables in a statistical model that are used to explain variations in the response variable.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean.

Measure Of Central Tendency

A statistical concept that provides a single value as an estimate of the center of a distribution of values, commonly calculated as the mean, median, or mode.