Assume That the Plastics Division Has Excess Capacity and It

question 26

Multiple Choice

Assume that the Plastics Division has excess capacity and it has negotiated a transfer price of $5.60 per plastic component with the Entertainment Division.This price will

• A)cause the Plastics Division to reduce the number of commercial plastic components it manufactures.
• B)motivate both divisions as estimated profits are shared.
• C)encourage the Entertainment Division to seek an outside source for plastic components.
• D)demotivate the Plastics Division causing mediocre performance.

---

Definitions:

Quadri-

A prefix meaning "four," used in medical terms to signify four parts or quadruple.

Extra-

A prefix meaning outside, beyond, or in addition to.

Inside

The inner part or space of something.

Inner

Pertaining to or situated on the inside; internal.