Answer the Following Questions Using the Information Below:
Plish Company

question 100

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 transfer price per compressor from the Compressor Division to the Fabrication Division if the transfer price per compressor is 110% of full costs?

• A) $16.50
• B) $24.50
• C) $28.18
• D) $36.03

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Definitions:

Circadian Rhythm

The natural, inner process that directs the wake-sleep cycle and recurs roughly every 24 hours.

Unconscious Information Processing

The handling and reaction to information by the brain without conscious awareness.

Visual Cortex

The part of the cerebral cortex responsible for processing visual information.

Hypnagogic Sensations

Experiences that occur at the onset of sleep, characterized by vivid sensory phenomena such as seeing shapes, hearing noises, or feeling as if falling.