The CD Division of Sound Company Makes and Sells Compact

question 8

Multiple Choice

The CD Division of Sound Company makes and sells compact disk players (CDP) that can be sold it presently sells to outside customers. Budgeted costs next month for the CD Division are as follows: $\begin{array}{lrr} \text {Sales of CDPs to outside customers. } & \text { 2,800 units} \\ \text { Selling price per CDP to outside customers. } &£ 185\\ \text {Unit variable production costs. } &£ 120\\\end{array}$

MaxiSound, another division of Sound Company, would like to buy 1,000 of the CDPs from the CD Division. An outside supplier has offered to sell similar CDPs to MaxiSound for £170 each.
-Assume the CD Division's monthly production capacity is 4,000 units. If the CD Division sells 1,000 CDPs to MaxiSound for £170 each, the monthly effect on the profits of CD Division will be a

• A)£65,000 increase.
• B)£50,000 increase.
• C)£185,000 increase.
• D)£170,000 increase.

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Definitions:

Convergence

The process or phenomenon where two or more separate species evolve similar traits independently, often due to similar environmental pressures.

Divergence

The process by which two or more related species become more different over time, often due to different environments or lifestyles.

Neural Circuit

A functional group of neurons, typically consisting of one or more afferent neurons, one or more interneurons, and one or more efferent neurons.

Schwann Cell

A type of glial cell in the peripheral nervous system which forms the myelin sheath around neuronal axons, enabling faster transmission of electrical signals.