3 . Question : ( TCO 7 ) The markup percentage is usually higher if the cost base used is 4 . Question : ( TCO 7 ) An understanding of life-cycle costs can lead to 5 . Question : ( TCO 7 ) Pritchard Company manufactures a product that has a variable cost of $ 30 per unit . Fixed costs total $ 1,500,000 , allocated on the basis of the number of units produced . Selling price is computed by adding a 20 % markup to full cost . How much should the selling price be per unit for 300,000 units ? 6 . Question : ( TCO 8 ) A product may be passed from one subunit to another subunit in the same organization . The product is known as 7 . Question : ( TCO 8 ) Transfer prices should be judged by whether they promote 8 . Question : ( TCO 8 ) When an industry has excess capacity , market prices may drop well below their historical average . If this drop is temporary , it is called 9 . Question : ( TCO 8 ) An advantage of using budgeted costs for transfer pricing among divisions is that 10 . Question : ( TCO 8 ) The seller of Product A has no idle capacity and can sell all it can produce at $ 20 per unit . Outlay cost is $ 4 . What is the opportunity cost , assuming the seller sells internally ? =========================================