The Western Division of Pryto Corporation Sells Part D to Other

question 28

Multiple Choice

The Western Division of Pryto Corporation sells Part D to other companies for $78.50 per unit. According to the company's cost accounting system, the costs to Western Division to make a unit of Product D are: The Southern Division of Pryto Corporation uses a part much like Part D in one of its products. The Southern Division can buy this part from an outside supplier for $78.25 per unit. However, the Southern Division could use Part D instead of this part that it purchases from outside suppliers. What is the most that the Southern Division would be willing to pay the Western Division for Product D?

• A)$78.50 per unit
• B)$76.00 per unit
• C)$74.00 per unit
• D)$78.25 per unit

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Definitions:

Asset Demand

Holding money as a store of value instead of other assets such as stocks, bonds, savings accounts, certificates of deposit, or gold.

GDP

Stands for Gross Domestic Product, which is the total monetary or market value of all the finished goods and services produced within a country's borders in a specific time period.

M

The money supply—currency, checking deposits, and check-like deposits (identical to M1).

Real GDP

Gross Domestic Product adjusted for inflation, which provides a more accurate reflection of an economy's size and growth rate over time.