(Appendix 11A) Division a Makes a Part with the Following

question 44

Multiple Choice

(Appendix 11A) Division A makes a part with the following characteristics:
Division B, another division of the same company, would like to purchase 5,000 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of $24 each.
-Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers.If Division A refuses to accept the $24 price internally and Division B continues to buy from the outside supplier,the company as a whole will be:

• A) worse off by $30,000 each period.
• B) worse off by $10,000 each period.
• C) better off by $15,000 each period.
• D) worse off by $35,000 each period.

Grasp the concepts of utilitarian justice and distributional justice in relation to income distribution.

Understand the legal capacity required for binding contracts and the special considerations for contracts involving minors.

Recognize circumstances under which parents are responsible for their children's contracts or actions.

Know the conditions under which contracts can be void due to incapacity, insanity, or being under the influence of substances.

---

Definitions:

Wages And Salaries

Refers to the remuneration paid to employees for their services, where wages are generally based on hours worked, and salaries are a fixed amount paid out regularly.

Tenant-Days

A measure used in real estate or hospitality to indicate the total number of days rented by all tenants over a given period.

Activity Variance

The difference between the actual and budgeted amount of activity, often used in variance analysis to identify and manage deviations in performance.

Direct Labor

The wages or costs associated with workers who are directly involved in the production of goods or services.