Brull Products, Inc

question 92

Multiple Choice

Brull 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 Brull 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 $60 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 56,000 units per year to 46,400 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) $75.00 per unit
• B) $77.00 per unit
• C) $83.00 per unit
• D) $96.80 per unit

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Definitions:

Salivary Conditioning

A form of classical conditioning where an automatic and natural response, like salivation, is trained to respond to a previously neutral stimulus.

Unconditioned Response (UR)

An instinctive, automatic response to a stimulus that takes place without any earlier learned behavior or conditioning.

Ring Tone

A noise produced by a phone signaling an incoming call or text message.

Feeling Happy

A state of well-being characterized by emotions ranging from contentment to intense joy.