Figure 12-4

question 27

Multiple Choice

Figure 12-4. Quinn Inc.has a number of divisions.One division,Style,makes zippers that are used in the manufacture of boots.Another division,LeatherStuff,makes boots that use the zippers and needs 90,000 zippers per year.Style incurs the following costs for one zipper:
Quinn has capacity to make 950,000 zippers per year,but due to a soft market,only plans to produce and sell 620,000 zippers next year.LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives) .
Refer to Figure 12-4.Assume that Quinn allows negotiated transfer pricing.What is the floor of the bargaining range and which division sets it?

• A)$3.50; Style
• B)$2.70; LeatherStuff
• C)$2.70; Style
• D)$1.38; LeatherStuff
• E)$1.38; Style

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Definitions:

Glial Cell

Non-neuronal cells in the nervous system that support, protect, and nourish neurons.

Myelin

A fatty substance that forms a protective coating around nerve fibers in the brain and spinal cord, improving the speed and transmission of electrical signals.

Axon

a long, slender projection of a nerve cell that typically conducts electrical impulses away from the neuron's cell body.

Transmission

Transmission, in the context of diseases, refers to the mechanisms through which an infectious agent is spread from one host to another.