Managers add the incremental cost to the opportunity cost to find which of the following prices?
A)Cost-based price.
B)Negotiated price.
C)Market-based price.
D)Minimum-transfer price.
E)Maximum-transfer price.

Question

Quizplus · Accepted Answer

The minimum-transfer price is calculated by adding the incremental cost to the opportunity cost, ensuring that the selling division covers its costs and the opportunity cost of not using the resources elsewhere.

Managers Add the Incremental Cost to the Opportunity Cost to Find