The DVD Division of Sound Company makes and sells compact DVD players (DVDP) that it presently sells to outside customers. Budgeted costs next month for the DVD Division are as follows:

MaxiSound, another division of Sound Company, would like to buy 1,000 of the DVDPs from the DVD Division. An outside supplier has offered to sell similar DVDPs to MaxiSound for $170 each.

-Assume that DVD Division's monthly production capacity is 3,200 units. If the DVD Division sells 1,000 DVDPs to MaxiSound for $170 each, the effect on the monthly profits of Sound Company as a whole will be a:
A)$9,000 decrease
B)$74,000 decrease
C)$20,000 increase
D)$11,000 increase

Question

The DVD Division of Sound Company makes and sells compact DVD players (DVDP) that it presently sells to outside customers. Budgeted costs next month for the DVD Division are as follows:

MaxiSound, another division of Sound Company, would like to buy 1,000 of the DVDPs from the DVD Division. An outside supplier has offered to sell similar DVDPs to MaxiSound for $170 each.

-Assume that DVD Division's monthly production capacity is 3,200 units. If the DVD Division sells 1,000 DVDPs to MaxiSound for $170 each, the effect on the monthly profits of Sound Company as a whole will be a:
A)$9,000 decrease 
B)$74,000 decrease 
C)$20,000 increase 
D)$11,000 increase

Quizplus · Accepted Answer

The Answer of The DVD Division of Sound Company makes and sells compact DVD players (DVDP) that it presently sells to outside customers. Budgeted costs next month for the DVD Division are as follows:

MaxiSound, another division of Sound Company, would like to buy 1,000 of the DVDPs from the DVD Division. An outside supplier has offered to sell similar DVDPs to MaxiSound for $170 each.

-Assume that DVD Division's monthly production capacity is 3,200 units. If the DVD Division sells 1,000 DVDPs to MaxiSound for $170 each, the effect on the monthly profits of Sound Company as a whole will be a:
A)$9,000 decrease 
B)$74,000 decrease 
C)$20,000 increase 
D)$11,000 increase

The DVD Division of Sound Company Makes and Sells Compact