Plish Company Manufactures Only One Type of Washing Machine and Has

question 28

Multiple Choice

Plish Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors for the Fabrication Division, which completes the washing machine and sells it to retailers. The Compressor Division "sells" compressors to the Fabrication Division. The market price for the Fabrication Division to purchase a compressor is $60.00. (Ignore changes in inventory.) The fixed costs for the Compressor Division are assumed to be the same over the range of 8000-13,000 units. The fixed costs for the Fabrication Division are assumed to be $11.50 per unit at 13,000 units.

What is the transfer price per compressor from the Compressor Division to the Fabrication Division if the transfer price per compressor is 110% of full costs?

• A) $19.80
• B) $32.45
• C) $47.30
• D) $54.45

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Definitions:

Cocaine

A powerful stimulant drug derived from the leaves of the coca plant, known for its potential for addiction and abuse.

LSD

A powerful psychedelic drug known for altering perception, mood, and various cognitive processes.

Barbiturates

A class of drugs that act as central nervous system depressants, used primarily as sedatives or hypnotics.

Craving

A powerful desire for something, often used in the context of addictive substances.