The following information will be used for questions four, five, and six.

Armenolos Company has two divisions, the Aldburg Division and the Archet Division. The Aldburg Division produces and sells transistors, which are currently sold to external customers and the Archet Division. In December, Aldburg Division projects the following results:

Selling price per transistor to external customers

$115

Unit variable production cost

$75

Monthly capacity to produce transistors

3,500 units

Sales of transistors to external customers

2,100 units

Archet division would like to purchase 1,200 transistors from Aldburg in December. Archet can purchase these transistors from an outside supplier at $110 each.

What is the minimum price that Aldburg would be willing to accept?

Select one:

a. $75

b. $115

c. There is insufficient information provided

d. $110

If Aldburg sells 1,200 of the transistors to Archet in December at a price of $110 per transistor, the monthly effect on profits for the Armenolos Company would be: Select one: a. $42,000 increase b. $48,000 increase c. $48,000 decrease d. $42,000 decrease

Assume the sales of transistors to external customers are expected to be 2,840 units in December, while all other conditions remain the same. If Aldburg sells 1,200 transistors to Archet in December at a price of $110 per transistor, the monthly effect on profits for Armenolos would be: Select one: a. $42,000 increase b. $21,600 increase c. $20,400 increase d. $42,000 decrease