The per unit opportunity cost to the selling subunit of company, is added into per unit incremental cost is incurred at point of transfer to calculate ____________?
Correct answer: D. minimum transfer price
- A. minimum operating cost
- B. maximum operating costs
- C. maximum transfer price
- D. minimum transfer price
Explanation
The selling subunit’s minimum transfer price is its incremental cost plus the opportunity cost of the resources used. This formula identifies the minimum transfer price, not the maximum price.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? support@testustad.com
About Cost Accounting
Cost accounting measures and analyses the cost of producing goods or providing services for planning, control and pricing decisions. It covers direct and indirect costs, fixed and variable costs, job and process costing, break-even analysis, marginal costing, overhead allocation, and the difference between product cost and period cost.
Practise Cost Accounting
941 free Cost Accounting MCQs from Accounting, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Exams that ask Accounting questions like this
Accounting is on 2 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Cost Accounting questions
Some of the methods used for determining transfer prices are ___________?
A situation when groups and individuals work together for achieving a particular goal can be classified as _________?
If the opportunity cost per barrel is $45 per unit, incremental cost per barrel is $65, then minimum transfer price will be __________?
The maximum freedom for managers and minimum constraints are the main features of ___________?
The price charged by one subunit to supply products or services to another unit is called _____________?
The method of pricing, when two separate pricing methods are used to price, transfer of products from one subunit to another, is called _____________?