In the Ambros Company, Division a Has a Product That

question 71

Multiple Choice

In the Ambros Company, Division A has a product that can be sold either to outside customers or to Division B. Information about these divisions is given below:
$\begin{array}{lrr}\text { Division A: }&\text { Case } 1&\text { Case } 2\\\text { Capacity in units } & 100,000 & 100,000 \\\text { Number of units sold externally } & 100,000 & 60,000 \\\text { Market selling price } & \$ 90 & \$ 75 \\\text { Variable costs per unit } & 73 & 58 \\\text { Fixed costs per unit based on capacity } & 10 & 10\\\\\text { Division B: }\\\text {Number of units needed for production}&40,000&40,000\\ \text {Purchase price per unit from external supplier}&\$86&\$74\end{array}$

-Refer to the figure.The company uses the opportunity cost approach to transfer pricing.What is the maximum transfer price in Case 2?

• A)$58
• B)$68
• C)$74
• D)$75

---

Definitions:

Self-Concept

A psychological term that describes how one perceives oneself, encompassing beliefs, attitudes, and opinions about one's identity and abilities.

Self-Concept

An individual's understanding and assessment of their own abilities, appearance, and personality.

Internal Locus of Control

The belief that one is in control of their life and outcomes, attributing success and failure to one's own actions rather than external forces.

Ideal Self

The conception of oneself as one wishes to be or aspires to be, often involving goals, values, and desired traits.