Using the Formula in the Text, If the Lowest Acceptable

question 24

Multiple Choice

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

---

Definitions:

Total Revenue

The total amount of money a company receives from its sales of goods or services, calculated before any expenses are subtracted.

Relatively Elastic

Describes a situation in which the quantity demanded of a good or service changes significantly due to a change in its price.

Time Interval

A specific duration or period between two points or events in time.

Substitutes

Substitutes are goods or services that can replace each other in usage, providing consumers with alternative choices when purchasing.