Heart Company Has Two Divisions

question 86

Multiple Choice

Heart Company has two divisions.Division A is interested in purchasing 10,000 units from Division B.Capacity is available for Division B to produce these units.The per-unit market price is $30 per unit,with a variable cost of $25.The manager of Division A has offered to purchase the units at $22 per unit.In an effort to make this transfer price beneficial for the company as a whole,what is the range of prices that should be used during negotiations between the two divisions?

• A) $22 to $30
• B) $22 to $25
• C) over $30
• D) $25 to $30

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Definitions:

Labor Unions

Organizations that represent the collective interests of workers in negotiations with employers regarding wages, working conditions, and rights.

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A division or sector within a telecommunications company responsible for the operation and management of telephone line connections, traditionally involving human operators.

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A concept or movement promoting unity, cooperation, and solidarity among different nations, peoples, or professional groups across the globe.

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A sector concerned with the production and distribution of yarn, cloth, and clothing made from natural or synthetic fibers.