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:

Blinking

A rapid, involuntary action of the eyelids that helps to lubricate and protect the eyes.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually comes to trigger a conditioned response.

Unconditioned Stimulus

In behavioral psychology, a stimulus that naturally triggers a response without any need for prior learning.

Tone

The quality or character of sound or the attitude conveyed in speech or written text.