Use the Information Below to Answer the Following Question(s)

question 143

Multiple Choice

Use the information below to answer the following question(s) .Soft Cushion Company is highly decentralized.Each division is empowered to make its own sales decisions.The Assembly Division can purchase cushion stuffing from the Production Division or from external suppliers.The Production Division has been the major supplier of stuffing in recent years.The Assembly Division has announced that two external suppliers will be used to purchase the stuffing at $20 per kilogram for the next year.The Production Division recently increased its unit price to $40.The manager of the Production Division presented the following information; variable cost $32, fixed cost $8, to top management in order to attempt to force the Assembly Division to purchase the stuffing internally.The Assembly Division purchases 20,000 kg per month.
-In analyzing transfer prices

• A)the buyer will not willingly purchase a product for less than the incremental costs incurred to manufacture the product internally.
• B)the seller should not sell a product for less than the incremental costs incurred to make the product.
• C)the buyer will willingly pay more than the ceiling transfer price.
• D)the buyer will not pay less than the ceiling transfer price.
• E)the buyer will not pay the incremental costs.

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Definitions:

Substance Withdrawal

Symptoms that occur upon the reduction or cessation of intake of addictive substances to which one has become dependent, often leading to significant distress or impairment.

Cocaine

A powerful and addictive stimulant drug extracted from the leaves of the coca plant, which increases levels of dopamine in the brain circuits regulating pleasure and movement.

Physiological Responses

The body's automatic reactions to internal or external stimuli, often part of the nervous and endocrine systems' roles.

Tolerance

The process by which one's body becomes less responsive to a substance or a stimulus after repeated exposure.