The Ukulele Company's radio division currently is purchasing transistors from the Xiang Co for $3.50 each. The total number of transistors needed is 8,000 per month. Ukulele Company's electronics division can produce the transistors for a cost of $4.00 each and they have plenty of capacity to manufacture the units. The $4 is made up of $3 in variable costs, and $1 in allocated fixed costs. What
would be the total savings (or additional costs) if the transfer were to take place?
A) $4,000 Savings
B) $4,000 in additional costs
C) $8,000 Savings
D) $8,000 in additional costs
A
You might also like to view...
Based on the expectation that two people in conflict should first try to arrive at a settlement together, organizations have a policy of making managers available to hear complaints. Typically, the first "open door" is that of the employee's
A. choice of a neutral party. B. immediate supervisor. C. peers. D. immediate subordinates. E. personal counselor.
What are the disadvantages associated with using the percentage-of-sales method for establishing a retail communication budget?
What will be an ideal response?
When buying from a supplier in France, LTD, based in Cleveland, Ohio, has arranged for its bank to pay the supplier the cost of the desired material when it has passed customs in the United States. Which of the following terms is this type of bank promise called?
a. banker's acceptance b. bank trust service c. certified check d. letter of credit e. currency exchange agreement
In the trait approach to leadership, ________ distinguishes effective leaders from other people.
A. command-and-control attitude B. self-confidence C. material possessions D. high emotional quotient E. education