Answered step by step
Verified Expert Solution
Question
1 Approved Answer
When a division is operating at full capacity, the transfer price must be based on opportunity cost. A market-based transfer price. A cost-based transfer price.
When a division is operating at full capacity, the transfer price must be based on opportunity cost. A market-based transfer price. A cost-based transfer price. Total manufacturing cost. Opportunity cost means: benefit received by selling goods on behalf of other division. benefit received by selling goods to one of the other divisions within the company. benefit foregone by purchasing goods at a price lower than its total manufacturing cost. benefit foregone by choosing an alternative course of action. A market-based transfer price considers the_____when determining the price. variable costs sales price of goods cost of the goods contribution margin When replacing an old asset with a new one, the original purchase price of the old asset represents: relevant cost. differential costs. opportunity cost. sunk cost. 216. A company is planning to replace an old machine with a new one. Which of the following is a sunk cost in this decision? cost of the new machine selling price of the old machine future maintenance costs of the old machine original cost of the old machine Which of following statements is true of short-term decision making? Fixed costs and variable costs must be analyzed separately. All costs behave in the same way. Unit manufacturing costs arc variable costs. All costs involved in a decision are considered relevant. Which of the following is a historical cost that is always irrelevant? relevant cost differential cost opportunity cost sunk cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started