(Appendix 11A) Two of the Decentralized Divisions of Gamberi Electronics

question 65

Multiple Choice

(Appendix 11A) Two of the decentralized divisions of Gamberi Electronics Corporation are the Plastics Division and the Components Division. The Plastics Division sells molded parts to both the Components Division and to customers outside the corporation.
-Assume that the Plastics Division is currently operating at full capacity.Also assume that the Components Division wants to increase the number of parts it purchases from Plastics.In order to maintain its current level of profitability,the Plastics Division should not accept any transfer price on these additional parts that is below the:

• A) variable cost of the additional parts.
• B) full (absorption) cost of the additional parts.
• C) variable cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.
• D) full (absorption) cost of the additional parts plus the lost contribution margin on all units that could no longer be sold to customers outside the corporation.

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Definitions:

Sociocultural Influences

The impact of societal and cultural factors, including traditions, norms, and values, on individuals' attitudes, behavior, and development.

Gender

The socially constructed roles, behaviors, expressions, and identities of girls, women, boys, men, and gender diverse people.

Normative Influences

Social pressures to conform to the expectations or norms of a group of people.

Karma

A concept in Hinduism, Buddhism, and Jainism which refers to the cycle of cause and effect where an individual's actions, whether good or bad, influence their future.