Answer the Following Questions Using the Information Below:
Calculate the Division

question 3

Multiple Choice

Answer the following questions using the information below:
Calculate the Division operating profit for the Cool Air Company which manufactures only one type of air conditioner and has two divisions: the Compressor Division and the Assembly Division.The Compressor Division manufactures compressors for the Assembly Division,which completes the air conditioner and sells it to retailers.The Compressor Division 'sells' compressors to the Assembly Division.The market price for the Assembly Division to purchase a compressor is $77.(Ignore changes in inventory. ) The fixed costs for the Compressor Division are assumed to be the same over the range of 5000-10 000 units.The fixed costs for the Assembly Division are assumed to be $15.00 per unit at 10 000 units.
Compressor's costs per compressor are:
$\begin{array} { l r } \text { Direct materials } & \$ 34.00 \\ \text { Direct labour } & \$ 14.50 \\ \text { Variable overhead } & \$ 6.00 \\ \text { Division fixed costs } & \$ 15.00 \end{array}$

Assembly's costs per completed air conditioner are:
$\begin{array} { l r } \text { Direct materials } & \$ 300.00 \\ \text { Direct labour } & \$ 125.00 \\ \text { Variable overhead } & \$ 40.00 \\ \text { Division fixed costs } & \$ 15.00 \end{array}$
-Assume the transfer price for a compressor is 150% of total costs of the Compressor Division and 1000 of the compressors are produced and transferred to the Assembly Division.The Compressor Division's operating profit is:

• A)$36 500
• B)$31 750
• C)$34 750
• D)$32 750

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Definitions:

Alkyl Iodide

A chemical compound characterized by an alkyl group bonded to an iodine atom, used in organic synthesis.

E2 Elimination

A bimolecular elimination reaction where the removal of a hydrogen atom and a leaving group from adjacent carbon atoms occurs simultaneously.

Organic Product

A compound or substance that has been derived from living matter, typically containing carbon atoms in its molecular structure.

Sodium Ethoxide

A strong base formed from the reaction of ethanol and sodium, often used as a reagent in organic synthesis.