Question
Division Z of Sage Ltd. manufactures a product called A12. Current data for Division Z are as follows: Capacity 61753 Current production & sales 47704
Division Z of Sage Ltd. manufactures a product called A12. Current data for Division Z are as follows:
| Capacity | 61753 |
| Current production & sales | 47704 |
| Per unit data |
| |
|
| Selling price | $91.03 |
|
| Variable costs - production | 33.84 |
|
| Variable costs selling and administrative | 14.66 |
|
|
Division W of Sage Ltd. currently buys 23180 units of A12 yearly from an outside supplier. Division W would like to buy the 23180 units of A12 it needs annually from Division Z.
What is the per unit opportunity cost of lost sales if the internal transfer takes place?
Select one:
a. $9131.00
b. $16.75
c. $22.53
d. $42.53
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