Division a of Tripper Company Produces a Part That It

question 290

Multiple Choice

Division A of Tripper Company produces a part that it sells to other companies. Sales and cost data for the part follow: Division B, another division of Tripper Company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $38 per unit. If Division A sells to Division B, $1 in variable costs can be avoided.Assume that Division A is presently operating at capacity. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

• A) $37 per unit
• B) $39 per unit
• C) $36 per unit
• D) $38 per unit

Comprehend the strategic options available in aggregate planning, including chase and level strategies.

Recognize the impact of capacity utilization on aggregate planning.

Understand how aggregate planning is used for workforce adjustments.

Acknowledge the integration of aggregate planning within supply chain management.

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Definitions:

Composed

Being calm and self-possessed; serenity in behavior or attitude.

Identifies

Recognizes or establishes the identity of someone or something, often through analysis or comparison.

Recipient

An individual or entity that receives something from another source, such as a transfusion, donation, or award.

Letter Sent

The action of dispatching written correspondence to a specific recipient or address.