(Appendix 12A)Division T of Clocker Company Makes a Timer Which

question 10

Multiple Choice

(Appendix 12A) Division T of Clocker Company makes a timer which it sells for $30 to outside customers.The division has supplied the following data concerning the timer: Division S of Clocker Company is currently buying 5, 000 similar timers each month from an overseas supplier at $27 each.Division S would like to acquire its timers from Division T if the price is right. Suppose that Division T can sell only 10, 000 timers to outside customers.According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

• A)$24 per timer
• B)$27 per timer
• C)$30 per timer
• D)$15 per timer

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Definitions:

Horseplay

Rough or rowdy play or pranks that often involve physical activity without any intent to cause harm.

Nuclear

Pertaining to the nucleus of an atom or to energy produced by nuclear reactions, as well as relating to the core or central part of something.

Extended

Something that is made longer, further reaching, or more comprehensive than originally.

Polygynous

A mating system where a male has more than one female mate at the same time.