Chipper Division of Acme Corp

question 77

Multiple Choice

Chipper Division of Acme Corp.sells 80,000 units of part Z-25 to the outside market.Part Z-25 sells for $40,has a variable cost of $22,and a fixed cost per unit of $10.Chipper has a capacity to produce 100,000 units per period.Jones Division currently purchases 10,000 units of part Z-25 from Chipper for $40.Jones has been approached by an outside supplier willing to supply the parts for $36.What is the effect on Acme's overall profit if Chipper REFUSES the outside price and Jones decides to buy outside?

• A)No change.
• B)$140,000 decrease in Acme profits.
• C)$80,000 decrease in Acme profits.
• D)$40,000 increase in Acme profits.

---

Definitions:

Early Fourth Century CE

A period marking the early years of the 4th century (the 300s), significant for the spread of Christianity and Roman architectural advancements.

Official Religion

The religion endorsed by a government or state as its national or state religion, influencing laws and societal norms.

Encaustic Technique

An ancient painting method where pigments are mixed with hot wax and applied to a surface, known for its durability and rich color.

Panel Portraits

A type of painting or portrait made on a flat panel made of wood, metal, or another rigid substrate, rather than canvas.