Figure 5 Allied Industries Has Two Divisions: the Bradley Division and the and the Rommel

question 26

Multiple Choice

Figure 5
Allied Industries has two divisions: the Bradley Division and the Rommel Division. Information about the component that the Bradley Division produces is as follows:
The Bradley Division can produce up to 12,000 components per year. The Rommel Division needs 800 units of the component for a product it manufactures
-Refer to Figure 5 above. If the selling division did NOT have excess capacity, the minimum transfer price the selling division would be willing to accept would be

• A) £50
• B) £80
• C) £130
• D) £180

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Definitions:

Securities and Exchange Commission

A U.S. federal agency that oversees and enforces federal securities laws to protect investors and maintain fair, orderly, and efficient markets.

Insider Trading

Buying or selling a publicly-traded company's stock by someone who has non-public, material information about that stock.

Securities Exchange Act of 1934

A U.S. federal law that regulates the secondary trading of securities (stocks, bonds, and debentures) in the stock market.

Rule 10b-5

A regulation under the SEC that prohibits any act or omission resulting in fraud or deceit in connection with the purchase or sale of any security.