Hu Corporation Has Two Operating Divisions,A and B Division B Uses the Type of Product Produced by Division

question 77

Multiple Choice

Hu Corporation has two operating divisions,A and B.The following information is provided for Division A: $\begin{array}{|l|lr|}\hline \text { Unit selling price } & \$ & 200 \\\hline \text { Unit variable costs } & \$ & 120 \\\hline \text { Unit fixed costs } & \$ & 40 \\\hline\end{array}$ Division B uses the type of product produced by Division A and has approached Division A about buying the product internally.Division B is currently paying $180 to purchase the product from an outside source.If Division A sells internally it can save $5 per unit in variable costs.Assuming Division A is operating at capacity,what price should it charge Division B if the transfer is to be made?

• A) $115
• B) $195
• C) $125
• D) $200

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Definitions:

Tarsometatarsal

Referring to the joint connections between the tarsal bones of the foot and the metatarsal bones of the forefoot.

Temporomandibular Joint

The joint connecting the jawbone to the skull, facilitating movements for chewing and speaking.

Articulation

Articulation is the physical production of speech sounds or the joining together of bones at a joint, facilitating movement.

Mandible

The lower jawbone, which is the largest and strongest bone in the human face, crucial for biting and chewing.