Quinn IncHas a Number of Divisions

question 83

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 is the total benefit for Style?

• A) $243,000
• B) $292,500
• C) $168,300
• D) $69,000
• E) $81,000

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Definitions:

Premise

A premise or proposition that serves as the groundwork for a conclusion that is drawn from it.

Conclusion

The final part of something, particularly an argument or a logical reasoning process; the outcome that follows logically from premises.

DS

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Symbolize

To represent or stand for something else, especially an idea, by means of symbols or symbolism.