4. Art-Frames Co. manufactures standard sized frames, and expects the following number of frames to be sold during the last three months of 20X5: October: 20,000 November: 25,000 December: 40,000 Art-Frame tries to have inventory on hand at the end of each month to equal 20% of the following months sales. How many frames should Art-Frame produce during November? (Points: 5) 33,000 28,000 26,000 23,000 5. Fragrance, Inc. has two divisions: the Cologne Division and the Bottle Division. The Bottle Division produces containers that can be used by the Cologne Division. The Bottle Division incurs variable cost of $2.00 per unit, and its fixed cost is $.50 per unit. The Cologne Division can purchase similar containers from external suppliers for $2.90. The Bottle Division sells its containers to outside companies for $3.00 each. Assuming all of the containers produced by the bottle Division can be sold to outside companies, which of the following is the range at which a negotiated transfer price between the two divisions should occur? (Points: 5) A transfer price between $2.00 to $3.00 A transfer price between $2.00 to $2.90 A transfer price between $2.50 to $2.90 A transfer price between $2.50 to $3.00 There will be no transfer of containers from the Bottle Division to the Cologne Division. 6. Indicate which of the following statements about evaluating investment centers is false. (Points: 5) The use of the original cost of plant and equipment as part of operating assets (rather than book value) would help to eliminate the age of equipment as a factor in ROI computations. Residual income as a performance measure encourages managers to accept all investment projects that will benefit the company as a whole. Return on Investment would decrease if the turnover decreases. The use of residual income makes it easy to compare investment centers of different sizes