Nanke Products, Incorporated, Has a Sensor Division That Manufactures and Sells

question 220

Multiple Choice

Nanke Products, Incorporated, has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below: The Safety Products Division is currently purchasing 3,000 of these sensors per year from an overseas supplier at a cost of $59 per sensor. Assume that the Sensor Division is selling all of the sensors it can produce to outside customers. What should be the minimum acceptable transfer price for the sensors from the standpoint of the Sensor Division?

• A) $37 per unit
• B) $59 per unit
• C) $20 per unit
• D) $64 per unit

---

Definitions:

Intense Itching

Severe discomfort that leads to an urgent need to scratch the affected area of the skin.

Pelvic Inflammatory Disease

is an infection of the female reproductive organs, often caused by sexually transmitted diseases.

Female Infertility

The inability of a woman to conceive after one year of regular, unprotected sexual intercourse, due to various possible reasons.

Neisseria Gonorrhoeae

A bacterial species that causes gonorrhea, a sexually transmitted infection characterized by discharge and discomfort.