Chipper Division of Acme Corp

question 79

Multiple Choice

Chipper Division of Acme Corp.sells 80,000 units of part Z-25 to the outside market.Part Z-25 sells for $40,has a variable cost of $22,and a fixed cost per unit of $10.Chipper has a capacity to produce 100,000 units per period.Jones Division currently purchases 10,000 units of part Z-25 from Chipper for $40.Jones has been approached by an outside supplier willing to supply the parts for $36.What is the effect on Acme's overall profit if Chipper ACCEPTS the outside price and Jones continues to buy inside?

• A)no change
• B)$140,000 decrease in Acme profits
• C)$80,000 decrease in Acme profits
• D)$40,000 increase in Acme profits

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Definitions:

Theory of Mind

The cognitive ability to understand that others have beliefs, desires, and intentions that are different from one's own.

Self-awareness

The conscious knowledge of one's own character, feelings, motives, and desires.

Social Referencing

The intentional search for information about others’ feelings to help make sense of uncertain circumstances and events.

Learning Theory

A conceptual framework describing how knowledge is absorbed, processed, and retained during learning.