(Appendix 11A) Stokan Products, Inc

question 7

Multiple Choice

(Appendix 11A) Stokan Products, Inc., has a Antennae Division that manufactures and sells a number of products, including a standard antennae that could be used by another division in the company, the Aircraft Products Division, in one of its products. Data concerning that antennae appear below:
The Aircraft Products Division is currently purchasing 5,000 of these antennaes per year from an overseas supplier at a cost of $57 per antennae.
-Assume that the Valve Division is selling all of the valves it can produce to outside customers.Also assume that $7 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division?

• A) $33 per unit
• B) $63 per unit
• C) $56 per unit
• D) $57 per unit

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Definitions:

Repression

A defense mechanism where unpleasant thoughts or desires are unconsciously excluded from consciousness.

Blocking Feelings

An emotional defense mechanism where an individual unconsciously or consciously avoids experiencing or expressing certain emotions.

Denial

A defense mechanism where an individual refuses to accept reality or facts, often to avoid uncomfortable emotions or truths.

Projection

A psychological defense mechanism where an individual attributes their own unacceptable thoughts, feelings, or motives to someone else.