The Blade Division of Axe Company Produces Hardened Steel Blades

question 28

Multiple Choice

The Blade Division of Axe Company produces hardened steel blades.One-third of Blade's 30,000 unit output is sold to the Forestry Products Division of Axe;the remainder is sold to outside customers.Blades' estimated operating profit for the year is: The Forestry Division has an opportunity to purchase 10,000 blades of the same quality from an outside supplier on a continuing basis.The purchase price would be $1.25.If the Blade Division is now operating at full capacity and can sell all its units to outside customers at the present selling price,what is the differential cost to Axe of requiring that the blades be made internally and sold to the Forestry Division?

• A)$2,500.
• B)$5,000.
• C)$7,500.
• D)$10,000.

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Definitions:

Extravert

A personality trait characterized by outgoingness, high levels of sociability, and a preference for external stimulation.

Introvert

An individual who tends to be more focused on internal thoughts and feelings rather than seeking external stimulation.

Behaviorism

Behaviorism is a theory of learning based on the idea that all behaviors are acquired through conditioning and that the environment shapes behavior.

Social-cognitive Perspective

A psychological approach that highlights the importance of cognitive functions in interpreting social actions.