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The Micro Division of Silicon Computers produces computer chips that are sold to the Personal Computer Division and to outsiders.Operating data for the Micro Division are as follows:
The Personal Computer Division has just received an offer from an outside supplier to furnish chips at $8.60 each.The manager of Micro Division is not willing to meet the $8.60 price.She argues that it costs her $9.00 to produce and sell each chip.Sales to outside customers are at a maximum of 200,000 chips.Required:
a.Verify the Micro Division's $9.00 unit cost figure.
b.Should the Micro Division meet the outside price of $8.60? Explain on a per unit basis.
c.Prepare a Micro Division income statement for the sale to the Personal Computer Division assuming that the unit selling price of $8.60 is agreed.Comment on the allocation of fixed costs.
Stable Sense
A reliable and unchanging perception or awareness, often signifying a balanced and undisturbed emotional or cognitive state.
Accommodation
Piaget’s term for changes in a cognitive structure to include new information.
Primary Process Thinking
A mode of thinking primarily in the unconscious mind, driven by the pleasure principle and characterized by illogical and associative connections.
Generalization
The process of applying information or conclusions from specific instances to broader contexts or groups, often simplifying complex information.
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