(Appendix 11A) Steinhoff Products, Inc

question 50

Multiple Choice

(Appendix 11A) Steinhoff Products, Inc., has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below:
The Safety Products Division is currently purchasing 4,000 of these sensors per year from an overseas supplier at a cost of $48 per sensor.
-What is the maximum price that the Safety Products Division should be willing to pay for sensors transferred from the Sensor Division?

• A) $51 per unit
• B) $37 per unit
• C) $48 per unit
• D) $14 per unit

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Definitions:

Price

The financial requisition expected, imposed, or presented for something.

Output

The total amount of products or services produced by a company or economy in a given period.

Efficiency

The measure of how well resources are used and allocated to achieve a specific outcome with minimal waste.

Patent

A legal right granted to an inventor or assignee, giving them exclusive rights to manufacture, use, or sell an invention for a certain number of years.