Division a Produces a Part with the Following Characteristics Division B, Another Division in the Company, Would Like to \text

question 33

Multiple Choice

Division A produces a part with the following characteristics:
$\begin{array}{|l|r|}\hline \text { Capacity in Units } & 50,000 \text { units } \\\hline \text { Selling Price per Unit } & \$ 30 \\\hline \text { Variable Costs per Unit } & \$ 18 \\\hline \text { Fixed Costs per Unit } & \$ 3 \\\hline\end{array}$
Division B, another division in the company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $\$ 28$ per unit. If Division A sells to Division $B , \$ 1$ in variable costs can be avoided.
- Suppose Division A is currently operating at capacity and can sell all of the units it produces on the outside market for its usual selling price.From the point of view of Division A,any sales to Division B should be priced no lower than which of the following?

• A) $20.
• B) $27.
• C) $28.
• D) $29.

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Definitions:

Teenage Years

A period in human growth that occurs between childhood and adulthood, typically between the ages of 13 and 19, marked by various physical, emotional, and social changes.

Identity Diffusion

A status in identity development where an individual hasn't yet gone through an identity crisis or made any commitments regarding personal beliefs and career choices.

Lifespan Perspective

A psychological approach that considers the influence of age, experience, and cultural factors on the psychological development of an individual from birth to death.

Psychodynamic Perspective

An approach in psychology which emphasizes the systematic study of the psychological forces that underlie human behavior, feelings, and emotions and how they might relate to early experience.