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

question 96

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.
-The Production Division has no alternative use for the facilities used to manufacture the stuffing.What is the monthly operating income advantage (disadvantage) if the goods are purchased internally?

• A)$400,000
• B)$640,000
• C)$240,000
• D)$(240,000)
• E)$(400,000)

---

Definitions:

Interview Question

A query directed to an interviewee, designed to elicit information, assess suitability, or understand the candidate's perspective during an interview process.

Hypothetical Incident

An imagined or theoretical situation used for the purpose of analysis, discussion, or problem-solving.

Situational Interview

A job interview method where candidates are asked to describe how they would handle specific job-related situations, testing their problem-solving and decision-making abilities.

Poor Prediction Rate

The occurrence of low accuracy in forecasting future events, outcomes, or behaviors, often due to inadequate information or model flaws.