Use the Information Below to Answer the Following Question(s)

question 12

Multiple Choice

Use the information below to answer the following question(s) .Soft Cushion Company is highly decentralized.Each division is empowered to make its own sales decisions.The Assembly Division can purchase cushion stuffing from the Production Division or from external suppliers.The Production Division has been the major supplier of stuffing in recent years.The Assembly Division has announced that two external suppliers will be used to purchase the stuffing at $20 per kilogram for the next year.The Production Division recently increased its unit price to $40.The manager of the Production Division presented the following information; variable cost $32, fixed cost $8, to top management in order to attempt to force the Assembly Division to purchase the stuffing internally.The Assembly Division purchases 20,000 kg per month.
-The seller of product A has no idle capacity and can sell all it can produce at $20 per unit.Outlay cost is $4.What is the opportunity cost assuming the seller sells internally?

• A)$4
• B)$16
• C)$20
• D)$24
• E)$44

---

Definitions:

Furosemide

A diuretic medication used to treat fluid build-up due to heart failure, liver disease, or kidney disease by increasing urine production.

Duration of Action

The length of time the effects of a drug or medication last after reaching its peak action.

Military Hours

A timekeeping system that runs from 0000 to 2359, eliminating the need for AM and PM designations.

Fluoxetine

A selective serotonin reuptake inhibitor (SSRI) medication commonly prescribed to treat depression, anxiety, and certain eating disorders.