Zumsteg Products, Incorporated, has a Pump Division that manufactures and sells a number of products, including a standard pump. Data concerning that pump appear below:
The company has a Pool Products Division that could use this pump in one of its products. The Pool Products Division is currently purchasing 7,000 of these pumps per year from an overseas supplier at a cost of $81 per pump.
Required:
Assume that the Pump Division has enough idle capacity to handle all of the Pool Products Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions?
Definitions:
Imprinting
A critical period in early development where organisms form strong attachments and establish particular behaviors in response to specific stimuli or experiences.
Goslings
Young geese, especially newly hatched or very young ones.
Imprinting
A rapid learning process that occurs in some animals shortly after birth, leading them to recognize a particular individual or object as something to be followed or avoided.
Critical Period
A specific time during development when the presence or absence of certain experiences has a profound impact on the formation of abilities or characteristics.
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