Giga-Stuff, Inc -Refer to the Figure

question 100

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 is the total benefit for Giga-Stuff,Inc.?

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

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A state of reduced tension and stress, achieved through various techniques like deep breathing, meditation, or exercise.

Dangerous

Involving potential risk or harm to safety, health, or well-being.

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A trance-like state of focused attention and heightened suggestibility, often used for therapeutic purposes to modify behaviors, perceptions, and physiological responses.

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Acting in ways that are considered by society to be wrong, unethical, or unjust.