Quinn Inc.has a number of divisions.One division, Style, makes zippers that are used in the manufacture of boots.Another division, LeatherStuff, makes boots that use the zippers and needs 90,000 zippers per year.Style incurs the following costs for one zipper:
Quinn has capacity to make 950,000 zippers per year, but due to a soft market, only plans to produce and sell 620,000 zippers next year.LeatherStuff currently buys zippers from an outside supplier for $3.50 each (the same price that Style receives)
- Assume that Style and LeatherStuff have agreed on a transfer price of $3.25.What is the total benefit for Style?
Definitions:
Oil Coating
A process of applying a layer of oil on surfaces to provide lubrication, protection from corrosion, or aesthetic enhancement.
Oil Pollution
The contamination of the environment, especially aquatic ecosystems, due to the release of oil and its derivatives.
Tanker Accidents
Incidents involving large cargo ships carrying bulk liquids, such as oil, that can lead to significant environmental disasters when spills occur.
Environmental Terrorism
Acts intended to cause damage to the natural environment or to compromise public health and safety for the sake of political or social objectives.
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