A Selling Division Produces Components for a Buying Division That

question 5

Multiple Choice

A selling division produces components for a buying division that is considering accepting a special order for the products it produces. The selling division has excess capacity. The maximum price the buying division would be willing to accept is

• A)the selling division's variable costs.
• B)the buying division's outside purchase price.
• C)the price that would allow the buying division to cover its incremental cost of the special order.
• D)the price that would allow the selling division to maintain its current ROI.

Analyze the influence of situational factors versus personal disposition on behavior through attribution theory.

Evaluate the effects of persuasion methods (central and peripheral routes) on attitude change and decision-making.

Identify the consequences of social influence techniques, including conformity, obedience, and deindividuation, on individual actions.

Understand the significance of social norms and their effects on behavior, including prosocial behaviors like altruism and reciprocation.

---

Definitions:

Assets Financed

The acquisition of assets (e.g., equipment, property) using debt or other financial instruments rather than direct payment.

Debt To Equity Ratio

A financial ratio indicating the relative proportion of shareholder's equity and debt used to finance a company's assets.

Accounts Receivable Turnover

A financial ratio that measures how efficiently a company collects cash from its credit sales by dividing net credit sales by the average accounts receivable.

Inventory Turnover

A ratio showing how many times a company has sold and replaced inventory over a period.