Figure 20-6 Callahan Industries Is a Decentralized Company That Evaluates Its Divisions

question 37

Multiple Choice

Figure 20-6
Callahan Industries is a decentralized company that evaluates its divisions based on ROI. The Jones Division has the capacity to make 5,000 units of a component. The Jones Division's variable costs are £200 per unit.
The Thomas Division can use the component in one of its products. The Thomas Division would incur £100 of variable costs to put the component in its own product that sells for £500.
-Refer to Figure 20-6. Assume the Jones Division can sell 4,000 units at £420. Any excess capacity will be unused unless the units are purchased by the Thomas Division, which could use up to 200 units. The minimum transfer price that the Jones Division would be willing to accept would be

• A)£400.
• B)£200.
• C)£420.
• D)£360.

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Definitions:

Consenting Adults

Refers to individuals who are of legal age and have the capacity to make decisions about participating in activities, particularly sexual or other significant undertakings, with mutual agreement and understanding.

Paraphilias

Atypical sexual interests towards objects, situations, or individuals that are not part of normative stimulation.

Behavioral Theories

A set of principles that explain human behavior through learning and interaction with the environment.

Cognitive Theories

A set of theories in psychology that stress the importance of mental processes in understanding behavior, emotions, and thought patterns.