Spice Company Has Two Divisions,Parsley and Sage

question 112

Multiple Choice

Spice Company has two divisions,Parsley and Sage.Parsley produces a unit that Sage could use in its production.Sage currently is purchasing 50,000 units from an outside supplier for $50.Parsley is operating at less than full capacity and has variable costs of $27 per unit.The full cost to manufacture the unit is $38.Parsley currently sells 450,000 units at a selling price of $54.If an internal transfer is made,variable shipping and administrative costs of $2 per unit could be avoided.What would be the maximum transfer price?

• A)$25
• B)$27
• C)$38
• D)$50

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Definitions:

Delinquent Activity

Behavior, especially of a young person, that deviates from legal or social norms and may result in criminal actions.

Identity Development

The process by which a person develops a distinct sense of self throughout their life, often influenced by various social, cultural, and personal factors.

Conflict With Peers

Situations where disagreements or disputes arise between individuals of similar age groups, often leading to social stress or development of conflict resolution skills.

Maladjustment

Failure to adjust appropriately to environmental circumstances or to the demands of society or personal expectations.