Division X Makes a Part That It Sells to Customers

question 75

Multiple Choice

Division X makes a part that it sells to customers outside of the company.Data concerning this part appear below: Division Y of the same company would like to use the part manufactured by Division X in one of its products.Division Y currently purchases a similar part made by an outside company for $70 per unit and would substitute the part made by Division X.Division Y requires 5,000 units of the part each period.Division X can already sell all of the units it can produce on the outside market.What should be the lowest acceptable transfer price from the perspective of Division X?

• A)$75
• B)$66
• C)$16
• D)$50
• E)$25

---

Definitions:

Secondary Data

Information that has been collected previously by someone else for a different purpose but can be utilized for a new research project or analysis.

Salesforce Survey Forecast

A predictive analysis tool within the Salesforce platform that helps businesses forecast and analyze the outcomes of sales and customer surveys.

Prospective Customers

Potential clients who have shown interest in a company's product or service but have yet to make a purchase.

Salespeople

Individuals who are tasked with selling products or services to customers, often acting as the direct link between the company and its clients.