Figure 20-3 the Adam Division Produces a Component That Is Used by Used

question 39

Multiple Choice

Figure 20-3
The Adam Division produces a component that is used by the West Division. The cost of manufacturing the component is as follows: ^aBased on a practical volume of 250,000 components
Other costs incurred by the Adam Division are as follows: The component usually sells for £90 in the external market. The Adam Division is capable of producing 250,000 components per year; however, only 200,000 components are expected to be sold next year. The variable selling expenses are avoidable if the component is sold internally.
The West Division has been buying the same component from an external supplier for £80 each. The West Division expects to use 40,000 units of the component next year. The manager of the West Division has offered to buy 40,000 units from the Adam Division for £56 each.
-Refer to Figure 20-3. The effect on firmwide income if 40,000 components are transferred internally at £56 each instead of purchased from an external supplier at £80 per unit would be a

• A) £1,920,000 decrease.
• B) £1,280,000 increase.
• C) £960,000 decrease.
• D) £960,000 increase.

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Definitions:

Induction Genes

Genes that are activated (or induced) by specific environmental conditions or stimuli, leading to the production of functional proteins as a response.

Free Radicals

Highly reactive molecules with unpaired electrons that can cause cellular damage through oxidative stress.

Metabolic Processes

The biochemical processes that occur within living organisms to maintain life, including anabolism and catabolism.

Antioxidant Enzymes

Enzymes that help mitigate oxidative damage by neutralizing potentially harmful molecules known as free radicals.