In the Bombadier Company, Division a Has a Product That $A$

question 35

Multiple Choice

In the Bombadier Company, Division A has a product that can be sold either to outside customers or to Division B. Information about these divisions is given below: Division $A$ :
Case $1 \quad$ Case 2
Capacity in units
Number of units sold externally
Market selling price
$\begin{array} { r r } 100,000 & 100,000 \\ 100,000 & 60,000 \\ \$ 90 & \$ 75 \\ 73 & 58 \\ 10 & 10 \end{array}$
Fixed costs per unit based on capacity
Division $\mathrm { B }$ :
Number of units needed for production
Purchase price per unit from external supplier
40,000 $\$ 86$
40,000
$\$ 74$ The company uses the opportunity cost approach to transfer pricing. What is the minimum transfer price in Case 2?

• A)$58
• B)$74
• C)$68
• D)$75

---

Definitions:

Set Point

A theory suggesting there's a fixed, natural body weight or baseline that the body seeks to maintain.

Subjective Perceptions

Individual interpretations or experiences of reality, influenced by personal feelings, tastes, or opinions.

Overweight

A condition characterized by having more body fat than is optimally healthy, usually determined by a Body Mass Index (BMI) over the normal range.

Set Point

A theory suggesting that the body regulates its weight and energy level around a biologically predetermined point.