(Appendix 11A) Wetherald Products, Inc

question 100

Multiple Choice

(Appendix 11A) Wetherald Products, Inc., has a Pump Division that manufactures and sells a number of products, including a standard pump that could be used by another division in the company, the Pool Products Division, in one of its products. Data concerning that pump appear below:
The Pool Products Division is currently purchasing 4,000 of these pumps per year from an overseas supplier at a cost of $74 per pump.
-Assume that the Pump Division is selling all of the pumps it can produce to outside customers.What should be the minimum acceptable transfer price for the pumps from the standpoint of the Pump Division?

• A) $64 per unit
• B) $74 per unit
• C) $82 per unit
• D) $53 per unit

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Definitions:

Priority Rule

A guideline or criterion used to determine the sequence in which tasks or operations will be carried out in a process or system.

Johnson's Rule

A scheduling rule aimed at minimizing job setup or processing time and the total time to complete a group of jobs on two machines.

Sequencing Rule

Guidelines or algorithms used to determine the order in which tasks, operations, or jobs should be executed to optimize efficiency and outcomes.

Workstations

Computers or terminals at which users work, often specialized for particular tasks.