An Appropriate Transfer Price Between Two Divisions of the Stark

question 141

Multiple Choice

An appropriate transfer price between two divisions of The Stark Company can be determined from the following data: What is the natural bargaining range for the two divisions?

• A)Between $20 and $50.
• B)Between $50 and $70.
• C)Any amount less than $50.
• D)$50 is the only acceptable price.
• E)$20 is the only acceptable pricE.The minimum transfer price acceptable to the Fabricating Division = out-of-pocket cost + opportunity cost, in this case $20 . The maximum price the Assembly Division would be willing to pay would be the external market price, $50. Thus, the transfer price range would be between $20/unit and $50/unit.

---

Definitions:

LGBT Rights

The rights of lesbian, gay, bisexual, and transgender individuals to live without discrimination and enjoy the same protections and freedoms as anyone else.

Poster Campaign

A marketing effort that uses a series of posters to communicate a message or promote a brand, product, or event.

Shinola Detroit

A Detroit-based company known for its luxury goods, particularly watches, emphasizing quality manufacturing and revitalization of American craftsmanship.

Advertised

Refers to the promotion of products, services, or brands through various forms of media to increase awareness, interest, or sales.