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

question 12

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 all that it produces for £100 each. The Melton Division needs 100 units. What is the correct transfer price?

• A)£120
• B)£110
• C)£100
• D)£60

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Definitions:

Ethnic Groups

Groups of people distinguished by their cultural heritage, race, language, and common history.

Goodness Of Fit

A concept referring to how well an individual's characteristics match the demands or expectations of their environment, affecting their adjustment.

Parental Expectations

The beliefs or desires parents have regarding their children's behavior, achievements, and qualities.

Child Temperament

The innate traits that influence how a child reacts to their environment and regulates their emotions, often noticeable in early infancy.