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7) Florida Inc. has revenues of $1,500,000 resulting in an operating income of $105,000. assets total $750,000; the cost ofcapital is 10%. The pront m ren, i C)14% Average invested A) 0.50 D) 7% B) 2.00 income of $105,000. late the 8) King Corp. has revenues of $1,500,000 resulting in an operating Average invested assets total $750,000, and the hurdle rate is 6%. Calcu income if sales increase by 10% and the profit margin and invested assets residual remain constant. A) SO A is the amount that A) residual income B) $70,500 C) $115,500 D) $45,000 another division withinhdiision charges when it sells goods or services to another division within the same B) related price D) transfer price C) negotiated price 10) When negotiating a transfer price, the highest price the buyer will be willing to pay is the , while the lowest price the seller will be willing to accept is the A) full cost; variable cost C) market price; full cost B) variable cost; market price D) market price; variable cost 11) Evergreen Corp. has two divisions, Fern and Bark. Fern produces a widget that Bark could use in the production of units that cost $175 in variable costs, plus the cost of the widget, to manufacture. Fern's variable costs are $60 per widget, and fixed manufacturing costs are applied at a rate of $36 per widget. Widgets sell on the open market for $105 each. Evergreen's policy is that internal transfers will be made at variable cost. If Bark purchases the widgets from Fern, what will be the transfer price? A) $100 B) S175 C) $96 D) S60 12) Evergreen Corp. has two divisions, Fern and Bark. Fern produces a widget that Bark could use in the production of units that cost $175 in variable costs, plus the cost of the widget, to manufacture. Fern's variable costs are $60 per widget, and fixed manufacturing costs are applied at a rate of $36 per widget. Widgets sell on the open market for $105 each. Evergreen's policy is that internal transfers will be made at variable cost plus 20%. If Bark purchases the widgets from Fern, what will be the transfer price? A) $72.00 B) S126.00 C) $210.00 D) $115.20

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