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

question 104

Multiple Choice

Colonial Computing Systems
Colonial 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 mouse from Production at $50 per unit.The Production Division is considering raising the price to $60 per unit.The Production Division's costs related to the mouse production is as follows:

The Marketing Division handles the promotion and distribution of the mouse purchases from the Production Division and sells each mouse for $100.Marketing Division incurs monthly fixed costs of $5,000.Marketing Division sells 1,500 units per month.Marketing Division can buy the same mouse from outside suppliers for $60.If the Marketing Division purchases the mouse from outside suppliers,the facilities the Production Division uses to manufacture the mouse would remain idle.
Refer to Colonial Computing Systems.The Production Division is operating below capacity because of weak global demand for the product.What should be the mouse transfer price between the Production Division and Marketing Division in order for Colonial to optimize profits?

• A)$ 50
• B)$ 55
• C)$ 60
• D)$100

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Definitions:

One-Parent Families

Household units consisting of a single parent living with their child or children, resulting from various circumstances such as divorce or death of a spouse.

Cohabitating

The act of living together and having a sexual relationship without being married.

Unmarried Women

Women who are not legally bound in marriage; also can refer to women who prioritize individual growth, career, or personal choices over matrimonial commitments.

Labor Force

The total number of people who are available to work, including those who are employed and those who are unemployed but seeking work.