evaluates divisional performance using both ROl and Residual Income. 7. Suppose a company divisional minimum required rate of return for purposes of residual income income of $6,000, then its ROI is greater than 12%. a. True b. False The is12%. ifadvision has a residual n to a Division of Dallas Industries makes a microchip that can either be sold to outside customers or to the Systems Division for use in making engineering test equipment. Annual data relating to the microchip are as follows: Annual Production Capacity Selling Price of the Microchip to Outside Customers Variable Cost per Chip Total Fixed Cost per Year 80,000 chips $35 $400,000 The Systems Division requires 15,000 chips per year and is currently paying an outside supplier $33 per unit. Consider each question below independently 38. If outside customers demand 50, Division would be willing to sell one microchip to the Systems Division? a. $35 b. $33 c. $28 d. $23 000 microchips per year, what is the minimum price at which the Microchip hips per year, then what is the minimum If the outside customers demand all 80,000 microc Microchip Division would be willing to sell one unit to the Systems Division? a. b. C. $28 price at which the 39. $35 $33 $23 ous question, what is the maximum amount the Systems Division would be willing to Referring back to the previ pa 40. y the Microchip Division for one microchip. $23 $28 $35 b. if the outside customers demand 80,000 microchips per year, and, if selling to the Systems Division, the 41. Microchip Division could avoid $3 per unit in variable selling expenses, then what is the minimum price the Microchip Division would be willing to sell one unit to the Systems Division? a $35 b. $33 c. $32 d. $23 Referring back to question 41, is it likely that the Microchip Division will el the needed microchips to the Systems Division and that the Systems Division will buy them from the Microchip Division? a. Yes b. No