Hinton Corporation Includes Two Divisions,Filter Division and Motor Division

question 108

Essay

Hinton Corporation includes two divisions,Filter Division and Motor Division.The Filter Division makes specialized filters,including one that could be used by the Motor Division.Costs for the filter are variable costs,$16; fixed costs,$20.Filter Division has capacity to make 20,000 of the filters,and it is operating at capacity.It sells the filters to other companies for $52 each.The Motor Division needs 8,000 filters per year,and it has been purchasing them from another company for $45 each.
Required:
1)Businesses traditionally have used different bases for establishing transfer prices.What basis should be used in this case?
2)If a transfer were to occur between Filter Division and Motor Division,what is the maximum that Motor Division should be willing to pay for the filters?
3)If a transfer were to occur between Filter Division and Motor Division,what is the minimum price that Filter Division should be willing to accept?
4)Do you recommend that a transfer occur between Filter Division and Motor Division? If the transfer did occur,what would be the effect on the overall profits of Hinton Corporation?

Grasp the concept of continental rifting and its role in the creation of new oceanic crust.

Know how geological maps and data are used to predict geological phenomena such as volcanic activities and the location of plate boundaries.

Understand the importance of determining the types of sources needed for research.

Recognize the variety of resources available in most libraries.

---

Definitions:

Economic Rewards

Benefits or incentives, often financial, given to individuals or groups as recognition for their contributions or achievements.

Sexual Harassment

Unwelcome or inappropriate sexual advances, requests for sexual favors, and other verbal or physical conduct of a sexual nature in a workplace or other professional or social situation.

Patriarchal Perspective

A viewpoint or analysis that sees male dominance and the privileging of masculine traits and roles as central to social organization.

Discursive Frames

Conceptual structures used in discourse to shape the understanding and interpretation of information or events.