Holiday Corp

question 68

Multiple Choice

Holiday Corp. has two divisions, Quail and Marlin. Quail produces a widget that Marlin could use in its production. Quail's variable costs are $4 per widget while the full cost is $7. Widgets sell on the open market for $12 each. If Quail has excess capacity, what would be the cost savings if the transfer was made and Marlin currently is purchasing 100,000 units on the open market?

• A) $0
• B) $700,000
• C) $800,000
• D) $1,200,000

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Definitions:

ATP

Adenosine triphosphate, a molecule that carries energy within cells, being essential for a multitude of cellular processes.

Thylakoid Membrane

A membrane-bound compartment inside chloroplasts and cyanobacteria. They are the site of the light-dependent reactions of photosynthesis.

Stroma

The supportive framework of a biological cell, tissue, or organ. In chloroplasts, it refers to the dense fluid surround the thylakoids wherein the light-independent reactions of photosynthesis occur.

Thylakoid Compartment

The site within chloroplasts containing chlorophyll where the light-dependent reactions of photosynthesis occur, arranged in stacks or lamellae.