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If the Selling Division Has Excess Capacity, the Transfer Price

Question 105

Multiple Choice

If the selling division has excess capacity, the transfer price should be set at its:


A) outlay costs.
B) outlay costs plus the foregone contribution to the organization of making the transfer internally.
C) selling price less the variable costs.
D) selling price less the variable costs plus the foregone contribution to the organization of making the transfer internally.

Correct Answer:

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