Adler Industries Is a Vertically Integrated Firm with Several Divisions

question 76

Multiple Choice

Adler Industries is a vertically integrated firm with several divisions that operate as decentralized profit centres. Adler's System Division manufactures scientific instruments and uses the products of two of Adler's other divisions. The Board Division manufactures printed circuit boards (PCBs) . One PCB model is made exclusively for the Systems Division using proprietary designs, while less complex models are sold in outside markets. The products of the Transistor Division are sold in a well-developed competitive market; however, one transistor model is also used by the Systems Division. The costs per unit of the products used by the systems Division are presented below: PCB Transistor
Direct materials $2.50 $0.80
Direct labour 4.50 1.00
Variable overhead 2.00 0.50
Fixed overhead 0.80 0.75
Total cost $9.80 $3.05
The Board Division sells its commercial products at full cost plus a 25% markup and believes the proprietary board made for the Systems Division would sell for $12.25 per unit on the open market. The market price of the transistor used by the Systems Division is $3.70 per unit.
(CMA) A per unit transfer price from the Transistor Division to the Systems Division at full cost, $3.05, would:

• A)Allow evaluation of both divisions on a competitive basis
• B)Satisfy the Transistor Division's profit desire by allowing recovery of opportunity costs
• C)Demotivate the Systems Division and cause mediocre performance
• D)Provide no profit incentive for the Transistor Division to control or reduce costs

Comprehend the development stages of the fetus, including neural tube formation and significant fetal growth periods.

Identify factors contributing to prenatal health disparities and the role of cultural support in pregnancy outcomes.

Know the physical protections and developments for a fetus during pregnancy, such as vernix caseosa and lanugo.

Understand the differentiation of embryonic layers into various body systems.

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Definitions:

Factors Of Production

The resources used to create goods or services, typically categorized into land, labor, capital, and sometimes entrepreneurship.

Short-Run

A time period in economics during which at least one input, such as plant size, is fixed and cannot be altered by a firm to respond to market changes.

Total Economic Cost

The sum of explicit and implicit costs, representing the total expense associated with producing a good or service.

Total Revenue

The overall amount of money generated by a business from its activities, such as sales of goods or services, before any expenses are subtracted.