Giga-Stuff, Inc -Refer to the Figure

question 107

Multiple Choice

Giga-Stuff, Inc. has a number of divisions. One division, Sophistosand, makes component X, which is used in the manufacture of DVD players. Another division, Videostuff, makes DVD players and needs 60,000 units of component X per year. Sophistosand incurs the following costs for one unit of component X:
Sophistosand has the capacity to make 400,000 units of component X per year but, due to a soft market, plans to produce and sell only 320,000 units next year. Videostuff currently buys component X from an outside supplier for $2.50 each (the same price that Sophistosand receives) .
$$\begin{array} { l r } \text { Direct materials } & \$ 0.30 \\\text { Direct labour } & 0.15 \\\text { Variable overhead } & 0.70 \\\text { Fixed overhead } & 1.00 \\\text { Total } & \$ 2.15\end{array}$$
-Refer to the Figure.Assume that Sophistosand and Videostuff have agreed on a transfer price of $2.20.What are the total cost savings for Videostuff?

• A)$18,000
• B)$63,000
• C)$69,000
• D)$81,000

Understand the concepts of defensive and nondefensive communication and their impact on interpersonal interactions.

Identify and explain various channels and technologies used in communication, focusing on their appropriateness and etiquette.

Recognize the barriers to effective communication, including language, stereotypes, and professional jargon, and strategies to overcome them.

Explain the role and characteristics of effective written communication in organizational contexts.

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Definitions:

Equilibrium Price

The price at which the quantity of a product offered by sellers equals the quantity of the product that buyers are willing to purchase, without any surplus or shortage in the market.

Equilibrium Quantity

The amount of products or services that are both provided and sought after at the balance price, where the supply meets the demand.

Rent Controls

Government-imposed rules that limit the amount landlords can charge for renting out their property, aiming to keep housing affordable.

Diagram

A simplified drawing showing the appearance, structure, or workings of something; often used in planning or explaining.