Hitek Ltd Has 2 Divisions, Diodes and Boards

question 23

Multiple Choice

Hitek Ltd has 2 divisions, Diodes and Boards. The diode can be sold internally or externally. If sold externally, the sales price is $15 per diode. The Boards division needs 3 diodes for each electronic board it produces. The external sales prices and costs are: If Diodes can sell all of its production externally, what is the minimum price at which it would be willing to sell internally, and what is the maximum price the Board Division would be willing to pay?

• A) $15/$2.50
• B) $15/$7.50
• C) $15/$15
• D) $15/$27

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Definitions:

Shareholders

Individuals or entities that own shares in a company, giving them partial ownership and potentially a say in company decisions depending on the type of shares held.

Sole Proprietorship

A business owned and operated by a single individual, with no legal distinction between the owner and the business entity.

Legal Structure

Pertains to the type of legal organization an entity chooses for the formation of their business, such as a corporation, partnership, limited liability company (LLC), or sole proprietorship.

Sole Proprietorship

A business structure where a single individual owns, operates, and is personally responsible for all aspects of the business.