If opportunity cost per barrel is $45 per unit, incremental cost per barrel is $65, then minimum transfer price will be

 

If opportunity cost per barrel is $45 per unit, incremental cost per barrel is $65, then minimum transfer price will be

a. $45
b. $110
c. $20
d. $65

To answer this question, you must understand each answer choice in the multiple-choice above. So you will find the right answer.

A. $45

It is Wrong Because $45 does not include the correct answer.

B. $110

it is True, because $110 is the best and correct answer to the above question. so, choose this answer.

C. $20

Wrong. Because $20 is a bad choice for an answer.

D. $65

This is also wrong, $65 Not completely the correct answer.

The Answer From If opportunity cost per barrel is $45 per unit, incremental cost per barrel is $65, then minimum transfer price will be

So the correct answer is B i.e. $110. Hopefully, it can help work on your problem and can add to your insight as well.