Exhibit 7-2 Cost schedule for pizza production
Pizzas
LaborCost
EnergyCost
MaterialsCost
0
$10
$ 0
$ 0
1
10
12
4
2
24
22
8
3
40
30
12
4
60
36
16
5
90
40
20
Exhibit 7-2 shows the labor, energy, and materials cost of making various quantities of pizzas. The table shows that the labor cost of making pizzas will:
A. increase at a decreasing rate.
B. decrease at a decreasing rate.
C. decrease at an increasing rate.
D. increase at an increasing rate.
Answer: D
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A transfer price is a price on goods and services sold by one member of a corporate family to another.
a. true b. false