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

question 24

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 is operating at capacity and can sell all of its output to outside customers at its usual selling price.If Division A agrees to sell the parts to Division B at $24 per unit,the company as a whole will be:

• A) better off by $5,000 each period.
• B) worse off by $15,000 each period.
• C) worse off by $5,000 each period.
• D) There will be no change in the profits of the company as a whole.

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Definitions:

Transference

A phenomenon in psychology where an individual unconsciously redirects feelings and attitudes from a person or situation in the past to a person or situation in the present.

Co-leadership

A leadership style where two or more individuals share the responsibility, authority, and accountability of leading an organization or group.

Coercive Power

The ability to compel or force someone to act in a certain way by using threats, punishment, or negative consequences.

Sanction

Official approval or penalty for conduct, depending on context.