The answer is $48.
The seller of product a has no idle capacity and can sell all it can produce at $60 per unit. outlay (variable) cost is $12. $48 is the opportunity cost, assuming the seller sells internally
It is calculated as follows:
Opportunity cost= Production cost- Outlay cost
= 60-12
=$48
Opportunity costs represent the potential benefits which any individual or investor, or any business misses out on when choosing one alternative over another.
Because the opportunity costs are generally unseen by definition, they can be easily overlooked. Understanding of the potential missed opportunities when any business or any individual chooses one investment over another investment allows for better decision making.
To know more about opportunity cost here:
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<h2>Meditation is the strategy which the coworkers should follow to resolve conflict.</h2>
Explanation:
Meditation is a very simple process which should be followed for peace of mind, calmness, mental relaxation and for various other benefits.
Since there are too much of conflict exists between coworkers, it is better if the coworkers do meditation daily, will calm down their mind and create an environment for them to talk with each other in a polite manner.
The calmness can be brought in many ways, but meditation is the simple solution and also powerful.
Answer:
Hence, the minimum transfer price = $2
Explanation:
Transfer price is the price at which goods are exchange between branches or divisions of the same group
Where a division is operating at the less than the existing capacity, to optimist the group profit, the minimum transfer price should be set as follows
Minimum transfer price = Variable cost
It is worthy of note that there is no opportunity cost associated with any transfer to the Cologne division because the Bottle division is currently having excess capacity- it can meets all demands both external and internal.
<em>Therefore, any offering price equal to or above the variable manufacturing cost of $2 would be acceptable and optimize the group profit</em>.
Hence, the minimum transfer price = $2
