Whitby Corporation Has Excess Capacity

Whitby Corporation has excess capacity. If Whitby desires to implement the general transfer-pricing rule, the opportunity cost to Whitby would be equal to:

A) zero.
B) the direct expenses incurred in producing the goods.
C) the total difference in the cost of production between two divisions.
D) the contribution margin forgone from the lost external sale.
E) the summation of variable cost plus fixed cost.