The Northern Division of CPP Corporation Supplies Parts to Its

question 38

Multiple Choice

The Northern Division of CPP Corporation supplies parts to its Southern Division. These parts are also available in the market from other suppliers. Northern Division is operating at 80% capacity, with a variable cost per unit of $6. Because of a personality conflict between the two division managers, however, Southern has elected to buy the part from outside suppliers at $7 per unit. As a result of this action, CPP Corporation will be:

• A) better off.
• B) worse off.
• C) forced to close Northern Division.
• D) forced to close Southern Division.

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Definitions:

After-School Clubs

Organized programs that provide children with activities and learning opportunities outside of regular school hours.

Freud

Sigmund Freud was an Austrian neurologist and the founder of psychoanalysis, a clinical method for treating psychopathology through dialogue.

Pleasure Principle

A psychoanalytic concept proposed by Freud that suggests individuals seek pleasure and avoid pain to satisfy biological and psychological needs.

Reality Principle

A mechanism functioning within the conscious and unconscious that weighs the costs and benefits of an action before deciding to act.