(Appendix 11A) Division S of Kracker Company Makes a Part

question 27

Multiple Choice

(Appendix 11A) Division S of Kracker Company makes a part that it sells to other companies. Data on that part appear below:
Division B, another division of Kracker Company, presently is purchasing 10,000 units of a similar product each period from an outside supplier for $28 per unit, but would like to begin purchasing from Division S.
-Suppose that Division S can sell all that it can produce to outside customers.If Division S sells to Division B at a price of $28 per unit,the company as a whole will be:

• A) worse off by $80,000 each period.
• B) worse off by $70,000 each period.
• C) better off by $20,000 each period.
• D) worse off by $20,000 each period.

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Definitions:

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The tendency for a group's prevailing attitudes or beliefs to become more extreme after discussing them as a group.

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