Division Alpha Can Purchase a Required Part from an Outside

question 39

Multiple Choice

Division Alpha can purchase a required part from an outside supplier at $35.Division Beta will supply the part at a transfer price of $38.50.Division Alpha's manager should

• A) pay the $38.50 price to Division Beta.
• B) tell his immediate supervisor that Division Beta is being unreasonable.
• C) negotiate an appropriate transfer price with the manager of Division Beta.
• D) buy from the outside supplier.

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Definitions:

Customer Expectations

The set of assumptions or beliefs about what services or products a company will provide and how they will be delivered, which influence customer satisfaction.

Organizational Metrics

Quantitative measures used to assess and track the performance and effectiveness of an organization.

Satisfied Customers

Individuals who have purchased a product or service and have their expectations met or exceeded by the experience.

New Sales

Revenue or transactions generated from selling products or services that are newly introduced to the market.