A Firm Has a Division That Produces X,whose Total Costs

question 24

Multiple Choice

A firm has a division that produces X,whose total costs are TC = 10 + Q² (where Q is the quantity of X) .The marketing division adds its own total costs of 5 + 3Q.In the competitive external market for X,the wholesale price is $10.The transfer price of X should be:

• A) $2.
• B) $5.
• C) $10.
• D) $12.
• E) $15.

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Definitions:

Sourcing Processes

The methods and procedures used by businesses to identify, evaluate, and contract with suppliers of goods and services.

Supplier Performance Analysis

A method used to assess and measure the effectiveness and efficiency of a supplier's performance in terms of quality, delivery, and cost.

Portfolio of Suppliers

The diverse group of vendors and suppliers that a company utilizes to procure goods and services necessary for its operations.

Replenishment Lot Size

The quantity of stock ordered to replenish inventory, balancing order costs with storage costs.