(Appendix 11A)Suppose That Division a Has Ample Idle Capacity to Handle

question 154

Multiple Choice

(Appendix 11A) Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers.If Division B continues to purchase parts from an outside supplier rather than from Division A,what will be the effect on the operating income of the company as a whole?

• A) Lower by $30,000 each period.
• B) Lower by $10,000 each period.
• C) Higher by $15,000 each period.
• D) Lower by $35,000 each perioD.
• (24 - 18)* 5,000 = $30,000 (Lower by $30,000 each period).

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Definitions:

CPU

Central Processing Unit acts as the core unit in a computer that handles the bulk of processing activities.

Primary Circuit Board

Also known as a motherboard, it is the main printed circuit board in computers and other complex equipment, housing the CPU, memory, and other crucial components.

CPU's

Stands for Central Processing Units, which are the primary components of computers responsible for interpreting and executing most of the commands from the computer's other hardware and software.

Kernel Speed

Refers to the efficiency or performance rate at which the core of a computer's operating system processes data or tasks.