Division a Makes a Part That It Sells to Customers

question 107

Multiple Choice

Division A makes a part that it sells to customers outside of the company. Data concerning this part appear below: $\begin{array}{lrr}\text { Selling price to outside customers } & \$ & 40 \\\text { Variable cost per unit } & \$ & 30 \\\text { Total fixed costs } & \$ &10,000 \\\text { Capacity in units } && 20,000\end{array}$

Division B of the same company would like to use the part manufactured by Division A in one of its products. Division B currently purchases a similar part made by an outside company for $38 per unit and would substitute the part made by Division A. Division B requires 5,000 units of the part each period. Division A has ample capacity to produce the units for Division B without any increase in fixed costs and without cutting into sales to outside customers. If Division A sells to Division B rather than to outside customers, the variable cost be unit would be $1 lower. What should be the lowest acceptable transfer price from the perspective of Division A?

• A) $40
• B) $30
• C) $29
• D) $10
• E) $38

Comprehend the process of policy formation and the importance of defining issues and setting agendas.

Know the poverty guidelines in the United States to understand socioeconomic factors affecting healthcare access and policy.

Understand the major challenges and problems facing the U.S. health care system.

Recognize the role and responsibilities of state and federal governments in health care.

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Definitions:

CMA(AAMA) Examination

A certification exam for Medical Assistants offered by the American Association of Medical Assistants, assessing competency in medical assisting.

Accredited Program

A program that has been officially recognized and certified by an accrediting agency as meeting certain standards.

Accreditation

The process by which an institution or organization is officially recognized as meeting certain predefined standards and quality.

Medical Assisting

A medical profession where assistants work alongside doctors and nurses, providing administrative and clinical support in healthcare settings.