WAX-D Inc Has a Division That Manufactures a Component That Sells

question 46

Multiple Choice

WAX-D Inc. has a division that manufactures a component that sells for $150 and has a variable cost of $45. Another division of the company wants to purchase the component. Fixed cost per unit of component is $25. What is the minimum transfer price if the division is operating at capacity?

• A)$150
• B)$45
• C)$55
• D)$140

---

Definitions:

Sternberg's Theory

This is Robert Sternberg's Triarchic Theory of Intelligence that suggests intelligence is comprised of three parts: analytical, creative, and practical intelligence.

Divergent Thinking

A cognitive process used to generate creative ideas by exploring many possible solutions and approaches in an open-ended way.

Concept

An abstract idea or a mental symbol that is typically used to denote a class of things, events, or phenomena.

Prototype

An original model or preliminary version of something from which other forms are developed or copied.