Given the Following Data for Keyboard Division The Computer Division Would Like to Purchase 15,000 Units Each

question 81

Multiple Choice

Given the following data for Keyboard Division:
$$\begin{array} { ll} \text { Selling price to outside customers } & \$ 25 \\\text { Variable cost per unit } & \$ 12 \\\text { Total fixed cost } & \$ 50,000 \\\text { Capacity (in units) } & 125,000\end{array}$$
The Computer Division would like to purchase 15,000 units each period from the Keyboard Division. The Keyboard Division has ample excess capacity to handle all of the Computer Division's needs. The Computer Division now purchases from an outside supplier at a price of $20. If the Keyboard Division refuses to accept an $18 price internally, the company, as a whole, will be worse off by:

• A) $30,000.
• B) $75,000.
• C) $90,000.
• D) $120,000.

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Definitions:

Gastric Bicarbonate

A bicarbonate ion (HCO3-) secreted by the stomach's mucosa that helps neutralize gastric acid and protect the stomach lining.

Cephalic Phase

The initial phase of digestion triggered by the sight, smell, thought, or taste of food, which stimulates gastric secretions in preparation for food ingestion.

Gastric Juice

A acidic fluid secreted by the stomach glands and active in promoting digestion.

Gastric Secretion

The process of producing and releasing fluids, including hydrochloric acid and digestive enzymes, by the stomach's lining.