Division R of Harris Corporation Has the Capacity for Making

question 101

Multiple Choice

Division R of Harris Corporation has the capacity for making 40,000 wheel sets per year and regularly sells 36,000 each year on the outside market. The regular selling price on the outside market is $89 per wheel set, and the variable production cost per unit is $56. Division S of Harris Corporation currently buys 6,000 wheel sets (of the kind made by Division R) yearly from an outside supplier at a price of $85 per wheel set. If Division S were to buy the 6,000 wheel sets it needs annually from Division R at $83 per wheel set, the change in annual net operating income for the company as a whole, compared to what it is currently, would be:

• A) $108,000
• B) $174,000
• C) $162,000
• D) $96,000

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Definitions:

Latency Stage

A period in Freudian psychosexual development occurring from about age six to puberty where sexual urges are inactive or latent.

Psychosexual Development

A Freudian concept that describes stages from infancy to adulthood in which pleasure is focused on specific bodily areas and conflicts arise that must be resolved.

Quantitative Advances

Quantitative advances refer to improvements or progress measured in numerical terms, typically regarding scientific research or data analysis.

Information-Processing Approach

The information-processing approach is a cognitive psychology theory that likens human thought processes to that of a computer, focusing on the way information is encoded, stored, and retrieved.