The Presence of Idle Capacity in the Selling Division May

question 47

Multiple Choice

The presence of idle capacity in the selling division may increase

• A)the incremental costs of production in the selling division.
• B)the market price for the good.
• C)the price that a buying division is willing to pay on an internal transfer.
• D)a negotiated transfer price.

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Definitions:

Legal Tender

The coins or banknotes that must be accepted if offered in payment of a debt.

Debit Cards

Plastic cards issued by banks that allow cardholders to transfer money electronically from their bank account when making a purchase.

Grace Period

A set period of time after the due date during which payment can be made without penalty.

M2

A money aggregate consisting of M1 plus savings deposits, small-denomination time deposits, money market mutual funds, and other miscellaneous near-monies.