Mandolin Company Has Two Divisions

question 10

Multiple Choice

Mandolin 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 $17. The manager of Division A has offered to purchase the units at $15 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) $15 to $30
• B) $15 to $17
• C) over $30
• D) $17 to $30

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Definitions:

Post-Training Environment

Refers to the conditions and support mechanisms in place at a workplace after training has occurred, which can influence the extent to which learned skills are applied on the job.

Newly Learned Skills

Abilities or expertise acquired through recent training or education, not previously possessed.

Learning Transfer System Inventory

An evaluative tool designed to assess the effectiveness with which knowledge or skills learned in one context are applied in another.

Transfer of Learning

The application of skills, knowledge, or abilities acquired in one context to different situations or environments.