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The short-term opportunity cost to one Division say, X, of transferring units of ‘X8(for example), to Division Y is the marginal cost of production, Z.
sir i dont understand the above mentioned example, especially how the transfer becomes an opportunity cost?
What you have typed does not make any sense on its own because there is no information as to why product Z has any relevance at all to units of X8.
Have you watched my free lectures on transfer pricing where I explain everything relevant for the exam. The lectures are a complete free course for Paper PM and cover everything needed to be able to pass the exam well.
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