Wigelsworth Products, Inc

question 88

Multiple Choice

Wigelsworth Products, Inc., has a Sensor Division that manufactures and sells a number of products, including a standard sensor. Data concerning that sensor appear below: The Safety Products Division of Wigelsworth Products, Inc needs 6,000 special heavy-duty sensors per year. The Sensor Division's variable cost to manufacture and ship this special sensor would be $32 per unit. Because these special sensors require more manufacturing resources than the standard sensor, the Sensor Division would have to reduce its production and sales of standard sensors to outside customers from 89,000 units per year to 79,400 units per year.
From the standpoint of the Sensor Division, what is the minimal acceptable transfer price for the special sensors for the Safety Products Division?

• A) $60.00 per unit
• B) $67.00 per unit
• C) $69.00 per unit
• D) $91.20 per unit

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Definitions:

Müller-Lyer Visual Illusion

An optical illusion that involves lines of equal length appearing to be different lengths due to the orientation of arrow-like figures at their ends.

Carpentry

The craft or activity involving the cutting, shaping, and installation of building materials during the construction of buildings, ships, timber bridges, and furniture.

Prominent

Something that stands out or is notably important within a certain context or area.

Right Angles

The angles formed by two lines intersecting at a point, where each angle measures exactly 90 degrees.