Use the Following Information for Questions
the Lumber Division

question 109

Multiple Choice

Use the following information for questions
The Lumber Division of Paul Bunyon Homes Inc. produces and sells lumber that can be sold to outside customers or within the company to the Construction Division. The following data have been gathered for the coming period: $\begin{array}{ll}\text { Lumber Division: }\\\text { Capacity } & 200,000 \text { board feet } \\\text { Price per board foot } & \$ 2.50 \\\text { Variable production cost per bd. ft. } & \$ 1.25 \\\text { Variable selling cost per bd. ft. } & \$ 0.50\\\text { Construction Division: }\\\text { Board feet needed } & 60,000 \\\text { Outside price paid per bd. ft. } & \$ 2.00\end{array}$ If the Lumber Division sells to the Construction Division, $0.35 per board foot can be saved in shipping costs.
-If current outside sales are 150,000 board feet, what is the minimum transfer price that the Lumber Division could accept?

• A) $2.00
• B) $1.65
• C) $1.40
• D) $2.15

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Definitions:

Moderate

To lessen the extremity of something, making it less severe, violent, or intense, or to act as an intermediator in a dispute.

Continuous

Uninterrupted in time, sequence, substance, or extent; without cessation or gaps.

Self-disclosure

The act of sharing personal, private, or sensitive information about oneself with others, often used to build trust and intimacy in relationships.

Therapeutic Relationship

The professional and compassionate bond between a therapist and their client, crucial for effective therapy.