Answer the Following Question(s)using the Information Below

question 7

Multiple Choice

Answer the following question(s) using the information below:
Greenlawn Ltd.has two divisions, Distribution and Production.The company's primary product is fertilizer.Each division's costs are provided below:
The Distribution Division has been operating at a capacity of 4,000,000 kilograms a week and usually purchases 2,000,000 kilograms from the Production Division and 2,000,000 kilograms from other suppliers at $0.45 per kilogram.
-What is the transfer price per kilogram from the Production Division to the Distribution Division, assuming the method used to place a value on each kilogram of fertilizer is 120% of full costs?

• A)$0.30
• B)$0.36
• C)$0.45
• D)$0.55
• E)$0.42

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Definitions:

Causal Relationship

A connection between two variables where a change in one directly causes a change in the other.

Pickup Truck

A light motor vehicle with an open-top rear cargo area (bed), typically used for transporting goods.

Negatively Correlated

Refers to two variables which move in opposite directions; when one variable increases, the other decreases, and vice versa.

Variables

Elements, features, or factors that are likely to vary or change and can be measured, controlled, or manipulated in experiments or models.