Figure 12-3 Quinn Has Capacity to Make 950,000 Zippers Per Year, but \\
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question 58

Multiple Choice

Figure 12-3 $\begin{array}{ll}\text { Direct materials } & \$ 0.23 \\\text { Direct labor } & \$ 0.20 \\\text { Variable overhead } & \$ 0.95 \\\text { Fixed overhead } & \$ 1.32 \\\text { Total } & \$ 2.70\end{array}$ Quinn has capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year. LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives) .
-Refer to Figure 12-4. Assume that Quinn allows negotiated transfer pricing. What is the floor of the bargaining range and which division sets it?

• A) $3.50; Style
• B) $2.70; LeatherStuff
• C) $2.70; Style
• D) $1.38; LeatherStuff
• E) $1.38; Style

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Definitions:

Crackles

Sounds heard in the lungs during inhalation that are indicative of fluid in the air spaces, which can be associated with conditions like pneumonia or heart failure.

Left-Sided Heart Failure

Abnormal condition characterized by impaired functioning of the left ventricle caused by elevated pressures and pulmonary congestion.

Breathing

The physiological process of taking in oxygen from the air and expelling carbon dioxide, essential for life in many organisms.

Mitral Valve

A valve in the heart that lies between the left atrium and left ventricle, which ensures one-way flow of blood from the atrium to the ventricle.