Division S of Goody Company Makes a Part with the Following

question 42

Multiple Choice

Division S of Goody Company makes a part with the following characteristics: $\begin{array}{lrr} \text { Production capacity. } & \text {50,000 units } &\\ \text {Selling price on the outside market. } &£ 20 \\ \text {Variable costs per unit. } &£ 12 \\ \text { Fixed costs per unit } &£ 3\\\end{array}$

Division B, another division in the same company, presently is purchasing 10,000 units of a similar part each period from an outside supplier, but would like to start purchasing from Division S. Division B is now paying a price of £18 per unit to the outside supplier.
-Suppose that Division S can sell all that it can produce to outside customers at its regular selling price. If Division S sells to Division B at a price of £18 per unit, the company as a whole will be

• A)worse off by £20,000 each period
• B)worse off by £30,000 each period
• C)worse off by £80,000 each period
• D)there will be no change in the status of the company as a whole

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Definitions:

Frequency

The number of occurrences of a repeating event per unit of time, often measured in hertz (Hz).

Timbre

Timbre is the quality of a musical note, sound, or tone that distinguishes different types of sound production, such as voices or musical instruments.

Tinnitus

The hearing of sound when no external sound is present, often described as ringing in the ears, but may also sound like clicking, hissing, or roaring.

Objective Tinnitus

A rare form of tinnitus that can be heard by others, typically caused by vascular anomalies or involuntary muscle contractions near the ear.