Division X Makes a Part with the Following Characteristics

question 70

Multiple Choice

Division X makes a part with the following characteristics: Division Y of the same company would like to purchase 10,000 units each period from Division X.Division Y now purchases the part from an outside supplier at a price of $17 each.Suppose Division X has ample excess capacity to handle all of Division Y's needs without any increase in fixed costs and without cutting into sales to outside customers.If Division X refuses to accept the $17 price internally and Division Y continues to buy from the outside supplier,the company as a whole will be:

• A)worse off by $70,000 each period.
• B)better off by $10,000 each period.
• C)worse off by $60,000 each period.
• D)worse off by $20,000 each period.
• E)better off by $60,000 each perioD.Instead of incurring a cost of $11 per unit,the company would have to incur a cost of $17 per unit to purchase from an outside supplier.Therefore,the company would be worse off by $60,000 per period = ($17 per unit - $11 per unit)* 10,000 units per period.

Calculate depreciation using the straight-line method.

Explain the process of preparing a worksheet and the importance of adjustments for accurate financial reporting.

Understand ethical and legal guidelines in the billing and collection process.

Know the important acts and regulations governing credit and debt collection.

---

Definitions:

Avoiding Relationships

A behavior pattern where an individual actively distances themselves from forming close or intimate relationships with others.

Transitional Object

An object, often a soft toy or blanket, used by children to provide psychological comfort in times of stress or change.

Psychosocial Development

A theory proposed by Erik Erikson that describes the impact of social experience across the whole lifespan, emphasizing the development of personality and the acquisition of social skills.

Archetype

A universally recognized symbol or pattern of behavior that is found in myths and collective unconscious, according to Jungian psychology.