Division a Produces a Part with the Following Characteristics

question 27

Multiple Choice

Division A produces a part with the following characteristics:

Division B, another division in the company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $28 per unit. If Division A sells to Division B, $1 in variable costs can be avoided.
-Suppose Division A is currently operating at capacity and can sell all of the units it produces on the outside market for its usual selling price.From the point of view of Division A,any sales to Division B should be priced no lower than which of the following?

• A) $20.
• B) $27.
• C) $28.
• D) $29.

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Definitions:

Farm Tools

Implements and machinery designed for agricultural purposes to facilitate farm work.

Public Safety

The welfare and protection of the general public, typically assured by government services like police, fire departments, and emergency medical services.

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The western boundary of the United States and Canada facing the Pacific Ocean, known for its diverse ecosystems and scenic beauty.

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Large, often destructive sea waves caused by underwater earthquakes, volcanic eruptions, or landslides.