Division G Makes a Part That It Sells to Customers

question 58

Multiple Choice

Division G makes a part that it sells to customers outside of the company.Data concerning this part appear below:
Division H of the same company would like to use the part manufactured by Division G in one of its products.Division H currently purchases a similar part made by an outside company for $83 per unit and would substitute the part made by Division G.Division H requires 500 units of the part each period.Division G has ample capacity to produce the units for Division H without any increase in fixed costs and without cutting into sales to outside customers.If Division G sells to Division H rather than to outside customers,the variable cost be unit would be $2 lower.What should be the lowest acceptable transfer price from the perspective of Division G?

• A) $47
• B) $87
• C) $83
• D) $57

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Definitions:

Mass Media

The various platforms and technologies used for communicating information to large audiences, including newspapers, radio, television, and the Internet.

Traditional Gender Roles

Roles, behaviors, activities, and traits deemed appropriate for men and women by society, as constructed through social interactions and norms.

Alternative Sexualities

Sexual orientations or practices that differ from mainstream societal norms or expectations.

Ideal Body Image

A societal construct that defines what is considered physically attractive and desirable in human appearance.