Use the Following Information for Questions

question 98

Multiple Choice

Use the following information for questions
Tuttle Motorcycles Inc. manufactures and sells high-priced motorcycles. The Engine Division produces and sells engines to other motorcycle companies and internally to the Production Division. It has been decided that the Engine Division will sell 20,000 units to the Production Division at $1,050 a unit. The Engine Division, currently operating at capacity, has a unit sales price of $2,550 and unit variable costs and fixed costs of $1,050 and $750, respectively. The Production Division is currently paying $2,400 per unit to an outside supplier. $90 per unit can be saved on internal sales from reduced selling expenses.
-What is the minimum transfer price that the Engine Division should accept?

• A) $2,460
• B) $2,550
• C) $2,400
• D) $1,500

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Definitions:

Universal Helplessness

A theory suggesting a belief in being unable to control or influence outcomes in most or all areas of life, leading to a state of passive resignation.

Specific Attributions

The process of assigning a cause to a particular behavior or event, focusing on factors unique to that specific situation.

Fundamental Attribution Error

The tendency for observers to underestimate situational influences and overestimate dispositional characteristics when explaining others' behaviors.

Stable Internal Characteristics

Traits or attributes within an individual that are enduring and consistent across different situations and over time.