The Selling Division's unit sales price is $25 and its unit variable cost is $15.Its capacity is 10,000 units.Fixed costs per unit are $6.Current outside sales are 8,000 units.
-What is the Selling Division's opportunity cost per unit from selling 3,000 units to the Purchasing Division?
A)$10
B)$25
C)$4
D)$0

Question

Quizplus · Accepted Answer

The opportunity cost per unit is the contribution margin lost from not selling to an outside customer. The contribution margin per unit is the selling price ($25) minus the variable cost ($15), which equals $10.

The Selling Division's Unit Sales Price Is $25 and Its