Parkside Inc Assume That the Entertainment Division Is Able to Purchase a Each

question 135

Multiple Choice

Parkside Inc. has three divisions (Entertainment, Plastics, and Video Card) , each of which is considered an investment center for performance evaluation purposes. The Entertainment Division manufactures video arcade equipment using products produced by the other two divisions, as follows:

1. The Entertainment Division purchases plastic components from the Plastics Division that are considered unique (i.e., they are made exclusively for the Entertainment Division) . In addition, the Plastics Division makes less-complex plastic components that it sells externally, to other producers.
2. The Entertainment Division purchases, for each unit it produces, a video card from Parkside's Video Card Division, which also sells this video card externally (to other producers) . The per-unit manufacturing costs associated with each of the above two items, as incurred by the Plastic Components Division and the Video Card Division, respectively, are:
$\begin{array}{lrr}&\text { Plastic }\\&\text { Components }&\text { Video Cards }\\\text { Direct material } & \$ 1.25 & \$ 2.40 \\\text { Direct labor } & 2.35 & 3.00 \\\text { Variable overhead } & 1.00 & 1.50 \\\text { Fixed overhead } & 0.40 & 2.25\\\text { Total cost }&\$5.00&\$9.15\end{array}$ Assume that the Entertainment Division is able to purchase a large quantity of video cards from an outside source at $8.70/unit. The Video Cards Division, having excess capacity, agrees to lower its transfer price to $8.70/unit. This action would likely:

• A) Optimize the profit goals of the Entertainment Division while subverting the profit goals of Parkside Inc.
• B) Allow evaluation of both divisions on the same basis.
• C) Subvert the profit goals of the Video Cards Division while optimizing the profit goals of the Entertainment Division.
• D) Cause mediocre behavior in the Video Cards Division as lost opportunity costs increase.
• E) Optimize the overall profit goals of Parkside Inc.

Evaluate the importance of romantic relationships in adolescence and early adulthood.

Comprehend how major life transitions affect interpersonal relationships.

Understand the evolving nature of sexuality and intimacy in older adulthood.

Understand the legal and sociological definition of crime in Canada.

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Definitions:

Summons

A legal document issued by a court that notifies an individual or entity of the initiation of legal proceedings against them and compels their appearance in court.

Appeals

The process of seeking a higher court's review of a lower court's decision in hopes of reversing or modifying the decision.

Clauses

Distinct provisions or sections within a legal document or contract that specify certain terms or conditions.

Jurisdiction

The power of a court to hear and decide a case.