Solved

Infobytes Corporation Infobytes Corporation Manufactures and Sells Various High-Tech Office

Question 82

Multiple Choice

Infobytes Corporation Infobytes Corporation manufactures and sells various high-tech office automation products.Two divisions of Infobytes Corporation are the Computer Chip Division and the Computer Division.The Computer Chip Division manufactures one product,a "super chip," that can be used by both the Computer Division and other external customers.The following information is available on this month's operations in the Computer Chip Division:
Infobytes Corporation Infobytes Corporation manufactures and sells various high-tech office automation products.Two divisions of Infobytes Corporation are the Computer Chip Division and the Computer Division.The Computer Chip Division manufactures one product,a  super chip,  that can be used by both the Computer Division and other external customers.The following information is available on this month's operations in the Computer Chip Division:   Presently,the Computer Division purchases no chips from the Computer Chips Division,but instead pays $45 to an external supplier for the 4,000 chips it needs each month. Refer to Infobytes Corporation.Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: $35 and $40.Corporate profits would be ____ if $35 is selected as the transfer price rather than $40. A) $20,000 larger B) $40,000 larger C) $20,000 smaller D) the same Presently,the Computer Division purchases no chips from the Computer Chips Division,but instead pays $45 to an external supplier for the 4,000 chips it needs each month.
Refer to Infobytes Corporation.Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: $35 and $40.Corporate profits would be ____ if $35 is selected as the transfer price rather than $40.


A) $20,000 larger
B) $40,000 larger
C) $20,000 smaller
D) the same

Correct Answer:

verifed

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Related Questions

Unlock this Answer For Free Now!

View this answer and more for free by performing one of the following actions

qr-code

Scan the QR code to install the App and get 2 free unlocks

upload documents

Unlock quizzes for free by uploading documents