Lock Division of Morgantown Corporation Sells 80,000 Units of Part

question 80

Multiple Choice

Lock Division of Morgantown Corporation 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. The Lock Division has a capacity to produce 100,000 units per period. The Cabinet Division currently purchases 10,000 units of part Z-25 from the Lock Division for $40. The Cabinet Division has been approached by an outside supplier willing to supply the parts for $36. What is the effect on Morgantown's overall profit if the Lock Division refuses to sell at the outside supplier's price and the Cabinet Division decides to buy outside?

• A) No change in Morgantown's profits.
• B) $140,000 decrease in Morgantown's profits.
• C) $80,000 decrease in Morgantown's profits.
• D) $40,000 increase in Morgantown's profits.

Comprehend the impact of organizational structure on ethical behavior within companies.

Understand the role of boards of directors in maintaining organizational ethics and shareholder interests.

Identify various levels of corporate social responsibility and examples of actions at each level.

Define and analyze ethical dilemmas, including their occurrence and nature.

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Definitions:

Water Usage

The act of using water for various purposes, including domestic, agricultural, industrial, and recreational activities, which can have significant environmental and economic implications.

Corporate Social Responsibility (CSR)

A self-regulating business model that helps a company be socially accountable to itself, its stakeholders, and the public.

Community

A group of people living in the same place or having a particular characteristic in common, often sharing a sense of belonging or mutual support.

Corporate Social Responsibility (CSR)

A commercial strategy that incorporates social and ecological considerations into its operations and stakeholder engagements.