Division a Produces a Part with the Following Characteristics

question 10

Multiple Choice

Division A produces a part with the following characteristics: Division B, another division in the company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $28 per unit. If Division A sells to Division B, $1 in variable costs can be avoided.
-Suppose Division A is currently operating at capacity and can sell all of the units it produces on the outside market for its usual selling price.From the point of view of Division A,any sales to Division B should be priced no lower than:

• A)$27
• B)$29
• C)$20
• D)$28

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Definitions:

Federal Minimum Wage

The lowest legal hourly wage that an employer can pay to workers in the United States, set by federal law.

Poverty Problem

A social issue involving a lack of financial resources that is enough to meet the basic needs such as food, clothing, and shelter.

Child Poverty Rate

The percentage of children living in households with an income below the poverty threshold defined by national standards.

2007-2008

The period marked by the global financial crisis, beginning with the collapse of the housing bubble in the United States and leading to a worldwide economic downturn.