(Appendix 11A) Bacot Products, Inc

question 38

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 has enough idle capacity to handle all of the Pump Division's needs.What should be the minimum acceptable transfer price for the valves from the standpoint of the Valve Division?

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

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Definitions:

Existential Import

In logic, the implication that a statement assumes the existence of the subject it mentions.

Modern View

A contemporary perspective or interpretation on a topic, often differing significantly from traditional or historic stances.

Existential Import

Refers to the implication that a statement about a category has at least one member.

Modern View

A contemporary perspective or way of thinking about a subject, often contrasting with traditional views.