Given the Following Data for Electrical Cord Division Assume That the Electrical Cord Division Is Selling All It

question 89

Multiple Choice

Given the following data for Electrical Cord Division:
$$\begin{array} { l r } \text { Selling price to outside customers } & \$40 \\\text { Variable cost per unit } & 30 \\\text { Total fixed cost } & 10,000 \\\text { Capacity (in units) } & 2,000\end{array}$$
Assume that the Electrical Cord Division is selling all it can produce to outside customers. If it sells to the Appliance Division, $1 can be avoided in variable cost per unit. The Appliance Division is presently purchasing from an outside supplier at $38 per unit. From the point of view of the company as a whole, any sales to the Appliance Division should be priced at:

• A) $40.
• B) $39.
• C) $38.
• D) The company would not want the transfer to take place.

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Definitions:

Meristem

Zone of undifferentiated parenchyma cells, the divisions of which give rise to new tissues during plant growth.

Secondary Xylem

The part of a plant that contributes to wood formation, responsible for water transport and structural support.

Cork Cambium

Lateral meristem that produces cork.

Primary Xylem

The first-formed xylem in a plant, responsible for water and mineral transportation, and it contributes to the plant's structural support.