Fregozo Products, Incorporated, Has a Connector Division That Manufactures and Sells

question 106

Multiple Choice

Fregozo Products, Incorporated, has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: The Transmission Division is currently purchasing 8,000 of these connectors per year from an overseas supplier at a cost of $45 per connector.Assume that the Valve Division is selling all of the valves it can produce to outside customers. Also assume that $10 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs. What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division?

• A) $31 per unit
• B) $54 per unit
• C) $44 per unit
• D) $45 per unit

---

Definitions:

Nonsignificant

A statistical term indicating that the results of an analysis do not show evidence to reject the null hypothesis, suggesting that any observed effect could be due to chance.

Insignificant

A term used in statistics to describe a result that fails to provide enough evidence to reject the null hypothesis.

Statistical Concept

A statistical concept encompasses principles and theories related to collecting, analyzing, interpreting, and presenting data in order to make informed decisions or conclusions.

Within-Subjects Research Design

Research design in which each participant appears in all levels or categories of the independent variable.