(Appendix 11A) Division a of Tripper Company Produces a Part

question 56

Multiple Choice

(Appendix 11A) Division A of Tripper Company produces a part that it sells to other companies. Sales and cost data for the part follow:
Division B, another division of Tripper Company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $38 per unit. If Division A sells to Division B, $1 in variable costs can be avoided.
-Assume that Division A is presently operating at capacity.According to the formula in the text,what is the lowest acceptable transfer price from the viewpoint of the selling division?

• A) $37 per unit
• B) $39 per unit
• C) $36 per unit
• D) $38 per unit

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Definitions:

Legalistic Authority

Authority based strictly on legal rules and regulations, often without consideration for individual circumstances or moral implications.

Personal Authority

The power or right to make decisions, judgments, or implement actions based on one's own personal knowledge and experience, often in a specific domain.

Institutional Regulations

Rules and guidelines established by organizations or institutions to govern their operations and conduct.

Inmate Leaders

Individuals within a prison population who hold influence or authority over other inmates, often unofficially.