1. Given the following data for Electrical Cord Division:

Selling price to outside customers	$	46
Variable cost per unit		36
Total fixed cost		16,000
Capacity (in units)		8,000

Assume that the Electrical Cord Division is selling all it can produce to outside customers. If it sells to the Appliance Division, $1 can be avoided in variable cost per unit. The Appliance Division is presently purchasing from an outside supplier at $44 per unit. From the point of view of the company as a whole, any sales to the Appliance Division should be priced at:

Multiple Choice

• $45.

• $43.

• $44.

• $46.

2. The Nacho Division of the Tex-Mex Company has a return on investment (ROI) of 12%, sales of $209,000, and an asset turnover of 2. What was Nacho's operating income?

Multiple Choice

• $50,160.

• $12,540.

• $25,080.

• $6,270.