Answer the Following Questions Using the Information Below:
Plish Company

question 41

Multiple Choice

Answer the following questions using the information below:
Plish Company manufactures only one type of washing machine and has two divisions, the Compressor Division, and the Fabrication Division. The Compressor Division manufactures compressors for the Fabrication Division, which completes the washing machine and sells it to retailers. The Compressor Division "sells" compressors to the Fabrication Division. The market price for the Fabrication Division to purchase a compressor is $40.00. (Ignore changes in inventory.) The fixed costs for the Compressor Division are assumed to be the same over the range of 5,000-10,000 units. The fixed costs for the Fabrication Division are assumed to be $7.50 per unit at 10,000 units.
Compressor's costs per compressor are:
$\begin{array} { l r } \text { Direct materials } & \$ 15.00 \\ \text { Direct labor } & \$ 7.25 \\ \text { Variable overhead } & \$ 3.00 \\ \text { Division fixed costs } & \$ 7.50 \end{array}$
Fabrication's costs per completed air conditioner are:
$\begin{array} { l r } \text { Direct materials } & \$ 150.00 \\ \text { Direct labor } & \$ 62.50 \\ \text { Variable overhead } & \$ 20.00 \\ \text { Division fixed costs } & \$ 7.50 \end{array}$
-What is the market-based transfer price per compressor from the Compressor Division to the Fabrication Division?

• A) $17.00
• B) $27.25
• C) $34.75
• D) $40.00

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Definitions:

Accommodation

The process of adjusting one's schemas and understandings to better fit new information or experiences; also refers to arrangements for lodging or settling disagreements.

Scaffolding

A process in education and learning that involves providing supportive structures and guidance to allow the student to achieve higher levels of understanding.

Temporary Scaffold

A support provided for learning that is gradually removed as the learner becomes more competent, facilitating independence in the learning process.

Higher Levels

Pertains to advanced or elevated stages or states in a hierarchy or scale, often referring to complexity, understanding, or consciousness.