The minimum price that the selling division wants from an inter-company transfer is the cost of the transfer plus the opportunity cost of the transfer.

Question

Quizplus · Accepted Answer

The selling division would want to at least cover the cost of the transfer and also consider the opportunity cost, which is the potential profit the division could have made by selling the transferred item externally. Therefore, the minimum price that the selling division wants would be the cost of transfer plus the opportunity cost.

The Minimum Price That the Selling Division Wants from an Inter-Company