Figure 20-2 Klaehn Industries Is a Decentralized Company That Evaluates Its Divisions

question 29

Multiple Choice

Figure 20-2
Klaehn Industries is a decentralized company that evaluates its divisions based on ROI. The Fahl Division has the capacity to make 1,000 units of a component. The Fahl Division's variable costs are £40 per unit.
The Melton Division can use the component in one of its products. The Melton Division would incur £50 of variable costs to convert the component into its own product that sells for £160.
-Refer to Figure 20-2. Assume the Fahl Division can sell 800 units at £120 each. Any excess capacity will be unused unless the units are purchased by the Melton Division, which could use up to 100 units. The maximum transfer price that the Melton Division would be willing to pay would be

• A)£120.
• B)£110.
• C)£100.
• D)£60.

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Definitions:

Relational Aggression

A form of aggressive behavior that harms others through intentional manipulation or damage to their social relationships.

Rapport Talk

A way of communication aimed at establishing connections and building relationships, often characterized by shared experiences, emotions, and personal stories.

Report Talk

A communication style that focuses on exchanging information, often used in more public settings and characterized by facts and logic.

Meta-analysis

Meta-analysis is a statistical procedure that integrates the results of multiple scientific studies to reach a more comprehensive conclusion regarding a particular question or hypothesis.