Quinn IncHas a Number of Divisions

question 122

Multiple Choice

Quinn Inc.has a number of divisions.One division, Style, makes zippers that are used in the manufacture of boots.Another division, LeatherStuff, makes boots that use the zippers and needs 90,000 zippers per year.Style incurs the following costs for one zipper:

Quinn has capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year.LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives)
-Assume that Style and LeatherStuff have agreed on a transfer price of $3.25.What are the total cost savings for LeatherStuff?

• A) $22,500
• B) $315,000
• C) $292,500
• D) $69,000
• E) $81,000

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Definitions:

Private Modifiers

Keywords in object-oriented programming languages used to restrict access to members of a class (such as variables or methods) from outside the class.

Instance Variables

Variables defined in a class for which each instantiated object of the class has its own separate copy, or instance.

Mutator Methods

Methods designed to set or modify the values of an object's attributes while keeping the encapsulation principle intact.

Integer Values

Whole numbers that can be positive, negative, or zero, not including decimals or fractions.