Dukes Computing Systems Dukes Computing Systems Manufactures and Sells Various Computer Products and Computer

question 32

Multiple Choice

Dukes Computing Systems
Dukes Computing Systems manufactures and sells various computer products and has two decentralized divisions: (1) Production and (2) Marketing.The Marketing Division has always purchased a particular motherboard from Production at $65 per unit.The Production Division is considering raising the price to $75 per unit.The Production Division's costs related to the motherboard production is as follows:

The Marketing Division handles the promotion and distribution of the motherboard purchases from the Production Division and sells each motherboard for $125.Marketing Division incurs monthly fixed costs of $5,000.Marketing Division sells 2,000 units per month.Marketing Division can buy the same motherboard from outside suppliers for $75.
Refer to Dukes Computing Systems.The Production Division is operating at maximum capacity because of strong worldwide demand for the product and the Production Division can sell all it produces to outside customers for $75 per motherboard.
What should be the motherboard transfer price between the Production Division and Marketing Division in order for Dukes' to optimize profits?

• A)$ 55
• B)$ 65
• C)$ 75
• D)$125

Understand the acquisition and maturity value handling of bonds.

Understand and record transactions related to controlling and significant influence in equity securities.

Differentiate between types of investments based on intentions like held-to-maturity, available-for-sale, and trading securities.

Comprehend the accounting treatment for foreign exchange transactions and the impact of exchange rate fluctuations.

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Definitions:

Local Commerce

The exchange of goods and services within a particular geographic area, usually within the confines of a city or town.

Can Spam Act

A federal law designed to reduce the use of unsolicited email, commonly known as spam, on the Internet.

Unsolicited Commercial

Advertisement material or communication sent to individuals without their prior request or consent, often seen as spam in emails or direct mail.

Federal Government

The national government of a federal country that has specific responsibilities which are distinct from those of its constituent states or provinces.