(Points: 10) Symington's Western Division is currently purchasing a part from an outsidesupplier for $26 per unit. The company's Eastern Division, which has no excess capacity, makesand sells this part for external customers at a variable cost of $19 and a selling price of $29. If Eastern begins sales to Western, it (1) will use the general transfer-pricing rule and (2) will beable to reduce variable cost on internal transfers by $2. On the basis of this information, Easternshould establish a transfer price of:1. $17.2. $19.3. $27.4. $29.5. some other amount.
(Points: 10) Gail is contemplating a job offer with an advertising agency where she will make$50,000 in her first year of employment. Alternatively, Gail can begin to work in her father's business where she will earn an annual salary of $40,000. If Gail decides to work with her father,the opportunity cost would be:1. $0.2. $40,000.3. $50,000.4. $90,000.5. irrelevant in deciding which job offer to accept.
(Points: 10) Which of the following costs can be ignored when making a decision?