Elite Inchas Many Divisions That Are Evaluated on the Basis of of Return

question 123

Multiple Choice

Elite Inc.has many divisions that are evaluated on the basis of return on investment (ROI) .One division, Beta, makes boxes.A second division, Lambda, makes chocolates and needs 90,000 boxes per year.Beta incurs the following costs for one box:

Beta has the capacity to make 720,000 boxes per year.Lambda currently buys its boxes from an outside supplier for $2.00 each (the same price that Beta receives) .
-Assume that Elite Inc.mandates that any transfers take place at full manufacturing cost. What would be the transfer price if Beta transferred boxes to Lambda?

• A) $1.35
• B) $1.76
• C) $1.00
• D) The transfer price cannot be determined from the information given.
• E) $0.90

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Definitions:

Overall Sacrifice

The total cost that a consumer perceives when purchasing a product or service, including money, time, and effort.

Monetary Payment

The process of transferring money, or its equivalent, from one party to another as compensation for goods or services provided.

Favorite Beverage

A preferred drink chosen by an individual out of personal liking.

Marketing Strategies

Comprehensive plans formulated to reach marketing goals, such as increasing brand awareness or market share, through a coordinated set of actions involving product, price, place, and promotion.