(Appendix 11A) Bacot Products, Inc

question 51

Multiple Choice

(Appendix 11A) Bacot Products, Inc., has a Valve Division that manufactures and sells a number of products, including a standard valve that could be used by another division in the company, the Pump Division, in one of its products. Data concerning that valve appear below:
The Pump Division is currently purchasing 8,000 of these valves per year from an overseas supplier at a cost of $47 per valve.
-Assume that the Valve Division is selling all of the valves it can produce to outside customers.What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division?

• A) $47 per unit
• B) $28 per unit
• C) $45 per unit
• D) $53 per unit

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Definitions:

Effort And Performance

This refers to the relationship between the amount of effort put into a given task and the resulting performance level, highlighting the direct impact effort has on outcomes.

Relationship

A connection, association, or involvement between two or more entities, often characterized by a level of emotional or social linkage.

Equity Model

A theory that suggests fairness in the workplace is achieved when the ratio of inputs to outcomes is balanced among employees.

Positives

Positives refer to the favorable aspects or outcomes associated with a situation, decision, or action.