Division 1 of Ace Company Makes and Sells Wheels That

question 5

Multiple Choice

Division 1 of Ace Company makes and sells wheels that can either be sold to outside customers or transferred to Division 2. The following data are available from last month:

Division 1:

Division 2:

If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales commissions.


-Suppose that Division 1 sells 7,500 units per month to outside customers. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division if Division 2 requires 5,000 units per month from Division 1?

• A)$33 per unit
• B)$35 per unit
• C)$47 per unit
• D)$50 per unit

Understand effort justification and other dissonance-reducing strategies.

Differentiate between the theory of reasoned action and the theory of planned behavior.

Explain the scientific process involved in social psychological research.

Understand how attitudes and behaviors are aligned or misaligned according to cognitive dissonance theory.

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