Hefner Corporation Hefner Corporation Is Comprised of Two Divisions: X and Y

question 63

Essay

Hefner Corporation
Hefner Corporation is comprised of two divisions: X and Y. X currently produces and sells a gear assembly used by the automotive industry in electric window assemblies. X is currently selling all of the units it can produce (25,000 per year) to external customers for $25 per unit. At this level of activity, X's per unit costs are:
Y Division wants to purchase 5,000 gear assemblies per year from X Division. Y Division currently purchases these units from an outside vendor at $22 each.
Refer to Hefner Corporation. What is the minimum price per unit that X Division could accept from Y Division for 5,000 units of the gear assembly and be no worse off than currently?

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Definitions:

Laboratory Studies

Research conducted in a controlled environment where variables can be manipulated and observed.

Cognitive Therapy

A form of psychotherapy that emphasizes the importance of thinking in how we feel and what we do, aiming to treat mental disorders by changing dysfunctional thought patterns.

Maladaptive Thoughts

Negative thinking patterns that are counterproductive and interfere with a person's ability to effectively cope with challenges and emotions.

Irrational Thoughts

Thoughts that lack reason or understanding, often not based on reality or logical reasoning, typically associated with anxiety and depression.