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(Appendix 11A) Brull Products, Inc., has a Sensor Division that manufactures and sells a number of products, including a standard sensor. Data concerning that sensor appear below:
The Safety Products Division of Brull Products, Inc needs 6,000 special heavy-duty sensors per year. The Sensor Division's variable cost to manufacture and ship this special sensor would be $60 per unit. Because these special sensors would requires more manufacturing resources than the standard sensor, the Sensor Division would have to reduce its production and sales of standard sensors to outside customers from 56,000 units per year to 46,400 units per year.
-From the standpoint of the Sensor Division,what is the minimal acceptable transfer price for the special sensors for the Safety Products Division?
Evidence-Based Management
The practice of making managerial decisions and organizational practices based on the best available evidence.
Total Quality Management
An organization-wide approach to continuous improvement in all aspects of products and services, involving all employees.
Continuous Improvement
An ongoing effort to improve products, services, or processes by making incremental enhancements over time.
Scientific Management
A management theory that examines and integrates processes to enhance economic efficiency and increase worker productivity.
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