What is the per unit opportunity cost of lost sales

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Reference no: EM132796808

Division Z of Sage Ltd. manufactures a product called A12. Current data for Division Z are as follows:

Capacity   59493

Current production & sales  46761

Per unit data

Selling price   $91.74

Variable costs - production  33.08

Variable costs - selling and administrative 15.53

Division W of Sage Ltd. currently buys 24533 units of A12 yearly from an outside supplier. Division W would like to buy the 24533 units of A12 it needs annually from Division Z.

Problem 1: What is the per unit opportunity cost of lost sales if the internal transfer takes place?

Select one:

a. $28.22

b. $43.13

c. $20.75

d. $11801.00

Reference no: EM132796808

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