Hu Corporation Has Two Operating Divisions,A and B $\begin{array}{lrr} \text { Unit selling price } &\$200\\ \text { Unit variable costs} &\$120\\ \text { Unit fixed costs } &\$40\\\end{array}$

question 14

Multiple Choice

Hu Corporation has two operating divisions,A and B.The following information is provided for Division A: $\begin{array}{lrr} \text { Unit selling price } &\$200\\ \text { Unit variable costs} &\$120\\ \text { Unit fixed costs } &\$40\\\end{array}$
Division B uses the type of product produced by Division A and has approached Division A about buying the product internally.Division B is currently paying $180 to purchase the product from an outside source.If Division A sells internally,it can save $5 per unit in variable costs.Assuming Division A is operating at capacity,what price should it charge Division B if the transfer is to be made?

• A) $115
• B) $195
• C) $125
• D) $200

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Definitions:

Sociological Imagination

The ability to see the relationship between individual experiences and the larger society.

Unemployment Rates

The percentage of the labor force that is jobless and actively seeking employment.

Economic Structures

Economic structures refer to the arrangement and organization of economic agents and institutions in a society, including how resources are distributed and managed.

Political Structures

Organized ways in which a society creates and maintains political authority, including governments, political parties, and legal systems.