21.4 Transfer Prices The Hazel Division's unit sales price is $100 and its unit variable cost is $60. Hazel has capacity to produce 10,000 units and is currently selling 8,000 units externally. Fixed costs per unit are $32. If the Hazel Division sells 2,000 units to the Wolf Division, what is the opportunity cost per unit to the Hazel Division?

Intermediate Financial Management (MindTap Course List)
13th Edition
ISBN:9781337395083
Author:Eugene F. Brigham, Phillip R. Daves
Publisher:Eugene F. Brigham, Phillip R. Daves
Chapter16: Capital Structure Decisions
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21.4 Transfer Prices The Hazel Division's unit sales price is $100 and its unit variable cost is $60.
Hazel has capacity to produce 10,000 units and is currently selling 8,000 units externally. Fixed
costs per unit are $32. If the Hazel Division sells 2,000 units to the Wolf Division, what is the
opportunity cost per unit to the Hazel Division?
Transcribed Image Text:21.4 Transfer Prices The Hazel Division's unit sales price is $100 and its unit variable cost is $60. Hazel has capacity to produce 10,000 units and is currently selling 8,000 units externally. Fixed costs per unit are $32. If the Hazel Division sells 2,000 units to the Wolf Division, what is the opportunity cost per unit to the Hazel Division?
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