Krenski Corporation Has a Parts Division That Does Work for Other

question 34

Multiple Choice

Krenski Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Equipment Division has asked the Parts Division to provide it with 10,000 special parts each year. The special parts would require £12.00 per unit in variable production costs.
The Equipment Division has a bid from an outside supplier for the special parts at £31.00 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the TW3 that it presently is producing. The TW3 sells for £35.00 per unit, and requires £13.00 per unit in variable production costs. Packaging and shipping costs of the TW3 are £3.00 per unit. Packaging and shipping costs for the new special part would be only £2.00 per unit. The Parts Division is now producing and selling 50,000 units of the TW3 each year. Production and sales of the TW3 would drop by 10% if the new special part is produced for the Equipment Division.
-The minimum transfer price for the Parts Division is

• A)£23.50
• B)£22
• C)£10.50
• D)£12

Recognize the significance of the name change from parish nursing to faith community nursing.

Identify common ethical issues faced by faith community nurses.

Understand the levels of care focus and the desire for further education among faith community nurses.

Recognize the historical involvement of faith communities in health and healing.

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Definitions:

Sell or Process Further

A decision-making process used in managerial accounting to determine whether it is more profitable to sell a product as is or process it further.

Incremental Revenue

The additional revenue generated from a new business action or decision, beyond the existing revenue stream.

Incremental Costs

Incremental costs refer to the additional costs that a company incurs when increasing its production or activities by a small amount, also known as marginal costs.

Accumulated Depreciation

The total amount of depreciation expense recorded for an asset over its life.