The Delta Manufacturing Company has two divisions in Ontario, Canada, Division One and Division Two. Currently, Division Two buys a part (10,000 units) from Division One for $16 per unit. Division One has purchased new equipment and wants to increase the price to Division Two to $18 per unit. The controller of Division Two claims that she cannot afford to go that high, as it will decrease the Division Twos profit to near zero. Division Two can buy the part from an outside supplier for $16 per unit. The incremental costs per unit that Delta incurs to produce each unit are Division Ones variable costs of $12. Fixed costs per unit for Division One with the recent purchase of equipment are $5.

11.If Division One could use its facilities for other manufacturing operations that would result in monthly cash operating savings of $45,000, what would be the advantage (disadvantage) to Delta?(A) $20,000(B) $(25,000)(C) $25,000(D) $5,000

13.Assume the Division Two is located in England rather than Ontario, Canada. The income tax rate used in England is 45%, whereas the effective income tax rate is 30% in Ontario. Which cost would be the best transfer price for the company as a whole (based upon original data)?

(A) Variable cost of $12(B) Market price of $16(C) Full cost of $17(D) The price that best promotes goal congruence.

14.Wyn Co. has an investment of $3,000,000, an income-to-revenue ratio of 4%, and an ROI of 12%. Its revenues are:

(A)$360,000 (B) $9,000,000(C) $1,440,000(D) $12,000,000

15.Fusion Inc. has an RI of $180,000 and operating income of $500,000. If the required rate of return is 16%, the amount of investment is:

(A)$320,000 (B) $3,125,000 (C) 8,000,000(D) $2,000,00016.What is Fusions ROI?(A) 5%(B) 10%(C) 20%(D) None of the above

6.What is Fusions ROI?

(A) 5%(B) 10%(C) 20%(D) None of the above.