Division a Makes a Part with the Following Characteristics

question 221

Multiple Choice

Division A makes a part with the following characteristics: Division B, another division of the same company, would like to purchase 16,100 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $19 each.Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division A refuses to accept the $19 price internally and Division B continues to buy from the outside supplier, the company as a whole will be:

• A) worse off by $89,800 each period.
• B) worse off by $10,100 each period.
• C) worse off by $64,400 each period.
• D) worse off by $12,800 each period.

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Definitions:

Corpus Callosum

The broad ribbon of nerve fibers that links the two hemispheres of the brain and facilitates communication between them.

Neurons

Neurons are the basic working units of the brain, specialized cells that transmit information to other nerve cells, muscle, or gland cells.

Association Areas

Regions of the brain involved in integrating information from different sensory inputs and are crucial for complex mental functions.

Master Stem Cells

Undifferentiated cells capable of giving rise to indefinitely more cells of the same type, and from which certain other kinds of cell arise by differentiation.