You Have Been Provided with the Following Information for the Wool

question 69

Multiple Choice

You have been provided with the following information for the Wool Division of a decentralized company:
$$\begin{array} { | l | r | } \hline \text { Selling price } & \$ 46 \\\hline \text { Variable cost per unit } & 33 \\\hline \text { Fixed costper unit } & 12 \\\hline \text { Sales volume (units) } & 22,500 \\\hline \text { Capacity (units) } & 26,000 \\\hline\end{array}$$ The Blanket Division would like to purchase all of its units internally.The Blanket Division needs 6,000 units each period and currently pays $42 per unit to an outside firm.What is the lowest price that Wool Division could accept from the Blanket Division? Assuming that the Blanket Division wants to use a sole supplier and will not purchase less than 6,000 from a supplier,what is the lowest price that Wool Division could accept from the Blanket Division?

• A) $45.
• B) $42.
• C) $40.
• D) $38.

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Definitions:

Sales Narrative

A compelling story or explanation designed to sell a product or service, highlighting its benefits and aligning with the customer's needs.

Mutual Fund

An investment vehicle made up of a pool of money collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments, and other assets.

Joint Probability

The probability of two or more events happening at the same time.

Equity Loan

A type of loan in which the borrower uses the equity of their home as collateral.