Delemos Products, Inc

question 96

Multiple Choice

Delemos Products, Inc., has a Transmitter Division that manufactures and sells a number of products, including a standard transmitter. Data concerning that transmitter appear below: The Remote Devices Division of Delemos Products, Inc needs 6,000 special heavy-duty transmitters per year. The Transmitter Division's variable cost to manufacture and ship this special transmitter would be $66 per unit. Because these special transmitters require more manufacturing resources than the standard transmitter, the Transmitter Division would have to reduce its production and sales of standard transmitters to outside customers from 83,000 units per year to 76,400 units per year.
From the standpoint of the Transmitter Division, what is the minimal acceptable transfer price for the special transmitters for the Remote Devices Division?

• A) $90.00 per unit
• B) $98.00 per unit
• C) $104.00 per unit
• D) $107.80 per unit

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Definitions:

Asia Pacific Economic Cooperation

A forum that links 21 countries to promote free trade and investment in the Pacific region.

Economic Alliance

A partnership between countries or organizations to pursue shared economic goals, often involving trade agreements or collaborative projects.

Restrictive Trade

Practices that limit competition within a market, often through regulations or agreements that control and reduce the level of trade.

Favourable Treatment

Preferential treatment or advantage given to a person or group over others.