The Vega Division of Ace Company Makes Wheels That Can $\$ 42$

question 145

Multiple Choice

The Vega Division of Ace Company makes wheels that can either be sold to outside customers or transferred to the Walsh Division of Ace Company. Last month, the Walsh Division bought all 4,000 of its wheels from the Vega Division for $\$ 42$ each. The following data are available from last month's operations for the Vega Division:
$\begin{array}{|l|r|}\hline \text { Capacity } & 12,000 \text { wheels } \\\hline \text { Selling Price per Wheel to Outside Customers } & \$ 45 \\\hline \text { Variable Costs per Wheel Sold to Outside Customers } & \$ 30 \\\hline\end{array}$
If the Vega Division sells wheels to the Walsh Division, Vega can avoid \$2 per wheel in sales commissions. An outside supplier has offered to supply wheels to the Walsh Division for $\$ 41$ each.
-) What is the maximum price per wheel that Walsh should be willing to pay Vega?

• A) $28.
• B) $41.
• C) $42.
• D) $45.

Understand methods to elevate creativity among workers and the significance of idea generation processes.

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Recognize the role and significance of data visualization in achieving marketing objectives.

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Definitions:

Certified Nursing Assistant

A healthcare professional specialized in providing care and assistance to patients in healthcare facilities under the supervision of nursing staff.

Fixed Costs

Expenses that remain constant regardless of the amount of products made or sold, including rent, wages, and insurance premiums.

Differential Analysis

A decision-making technique that involves comparing the costs and benefits of alternative actions.

Accumulated Depreciation

The total amount of depreciation expense that has been recorded against a fixed asset up to a specific date, reflecting its wear and use over time.