Figure 20-5
Allied Industries Has Two Divisions: the Bradley Division

question 14

Multiple Choice

Figure 20-5
Allied Industries has two divisions: the Bradley Division and the Rommel Division. Information about the component that the Bradley Division produces is as follows: $\begin{array}{lr}\text { Sales } & £ 180 \text { per unit } \\\text { Variable manufacturing costs } & £ 80 \text { per unit } \\\text { Fixed manufacturing overhead } & £ 50 \text { per unit } \\\text { Expected sales in units } & 10,000 \text { units }\end{array}$ The Bradley Division can produce up to 12,000 components per year. The Rommel Division needs 800 units of the component for a product it manufactures.
-Refer to Figure 20-5. If the selling division did NOT have excess capacity, the minimum transfer price the selling division would be willing to accept would be

• A)£50.
• B)£80.
• C)£130.
• D)£180.

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Definitions:

Robot Technology

The use of machines programmed to perform tasks autonomously in various applications, including manufacturing, healthcare, and services.

Computer-Integrated Manufacturing

A system of manufacturing in which all the processes are controlled by computers, enhancing efficiency and flexibility.

Proximity to Market

The closeness of a business or production facility to its customer base or target market, often affecting logistics and transportation costs.

Product Layout

An arrangement of machinery, equipment, and staff within a production facility, designed to enhance efficiency by organizing resources according to the sequence of operations.