Question

In: Accounting

The seller of a product has no idle capacity and can sell all it can produce...

The seller of a product has no idle capacity and can sell all it can produce at $33 per unit. The incremental variable cost is $9. What is the lost opportunity (cost) if the seller transfers the units to another division?

Question 6 options:

a)

 $6

b)

$ 0

c)

 $12

d)

 $33

e)

 $24

Solutions

Expert Solution

Solution:

Opportunity cost lost = Sales price - Incremental Variable cost

= $33 - $9 = $24

Hence option "e" is correct.

ekkarill92 answered 2 years ago
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