Figure 20-1
Universe Industries Has Two Divisions: the Haley Division

question 2

Multiple Choice

Figure 20-1
Universe Industries has two divisions: the Haley Division and the Comet Division. Information about a component that the Haley Division produces is as follows: $\begin{array}{lr}\text { Sales } & £ 120 \text { per unit } \\\text { Variable manufacturing costs } & £ 30 \text { per unit } \\\text { Fixed manufacturing overhead } & £ 20 \text { per unit } \\\text { Expected sales in units } & 4,000 \text { units }\end{array}$ The Haley Division can produce up to 5,000 components per year. The Comet Division needs 200 units of the component for a product it manufactures.
-Refer to Figure 20-1. The maximum transfer price that the Comet Division would be willing to pay is

• A)£120.
• B)£70.
• C)£50.
• D)£30.

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Definitions:

Ethical Decision Making

The process of evaluating and choosing among alternatives in a manner consistent with ethical principles.

Managerial Decisions

The process by which managers select a course of action among several alternatives to achieve organizational goals.

Problem Seeker

An individual or entity that proactively looks for potential issues or challenges before they escalate, to address them early.

Anticipated Need

Expectation of a requirement or demand in the future, often based on current trends or forecasts.