Dynamic Engine Corporation the Motor Division of Dynamic Engine Corporation

question 153

Multiple Choice

Dynamic Engine Corporation The Motor Division of Dynamic Engine Corporation uses 5,000 carburetors per month in its production of automotive engines.It presently buys all of the carburetors it needs from two outside suppliers at an average cost of $100.The Carburetor Division of Dynamic Engine Corporation manufactures the exact type of carburetor that the Motor Division requires.The Carburetor Division is presently operating at its capacity of 15,000 units per month and sells all of its output to a foreign car manufacturer at $106 per unit.Its cost structure (on 15,000 units) is:
Assume that the Carburetor Division would not incur any variable selling costs on units that are transferred internally.
Refer to Dynamic Engine Corporation.What is the maximum of the transfer price range for a transfer between the two divisions?

• A)$106
• B)$100
• C)$90
• D)$70

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Definitions:

Tetraethylammonium (TEA)

Tetraethylammonium (TEA) is a chemical compound known to block potassium channels in cells, used in research to understand ion channel functions and in studying neural and muscular activity.

Potassium Channels

Protein-based pathways located in cell membranes that allow potassium ions to flow in and out of cells, playing a critical role in maintaining the cell's electrical charge and signaling.

Sodium Channels

Protein channels in cell membranes that allow sodium ions to pass into or out of a cell, critical for generating and transmitting electrical signals in tissues like nerves and muscles.

Voltage-Activated

Referring to ion channels or processes within cells that are triggered or changed by alterations in electrical membrane potential.