Figure 20-5
Allied Industries Has Two Divisions: the Bradley Division

question 14

Multiple Choice

Figure 20-5
Allied Industries has two divisions: the Bradley Division and the Rommel Division. Information about the component that the Bradley Division produces is as follows: $\begin{array}{lr}\text { Sales } & £ 180 \text { per unit } \\\text { Variable manufacturing costs } & £ 80 \text { per unit } \\\text { Fixed manufacturing overhead } & £ 50 \text { per unit } \\\text { Expected sales in units } & 10,000 \text { units }\end{array}$ The Bradley Division can produce up to 12,000 components per year. The Rommel Division needs 800 units of the component for a product it manufactures.
-Refer to Figure 20-5. If the selling division did NOT have excess capacity, the minimum transfer price the selling division would be willing to accept would be

• A)£50.
• B)£80.
• C)£130.
• D)£180.

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Definitions:

Form

In logic and philosophy, the structure or pattern that an argument or expression follows, abstracting away from the content.

Quantity

A property that exists in a range of magnitudes and can be measured or quantified.

Quantity

The amount or number of a material or immaterial entity that is considered as a unit or in a measurable amount.

True Proposition

A statement that accurately describes a fact or situation, aligning with reality.