Fois Company Has Two Divisions, Division X and Division Y

question 44

Multiple Choice

Fois Company has two divisions, Division X and Division Y. Division X has a production capacity of 5,000 units of a particular part per month. Division X sells 4,400 units of the part each month to outside customers at a contribution margin of $56 per unit. Division Y would like to buy 800 units of the part each month from Division X. In computing the lowest acceptable transfer price from the perspective of the selling division, the lost contribution margin per unit portion of the transfer price computation would be:

• A) $56.00 per unit
• B) $30.00 per unit
• C) $14.00 per unit
• D) $25.00 per unit

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Definitions:

Primary Reinforcer

refers to stimuli that satisfy basic survival needs and hence are naturally reinforcing, such as food, water, and warmth.

Variable Reinforcement

A reinforcement strategy in which rewards are given out at unpredictable intervals or after an unpredictable number of responses, enhancing the persistence of the behavior.

Reward

A form of recognition or compensation given to individuals for their achievements, behavior, or performance, aimed at motivating and retaining talent.

Aversive Event

An unpleasant or noxious event or situation that an individual seeks to avoid or escape.