You Have Been Provided with the Following Information for Division

question 59

Multiple Choice

You have been provided with the following information for Division Sell of a decentralized company: Division Buy would like to purchase all of its units internally.Division Buy needs 6,000 units each period and currently pays $84 per unit to an outside firm.What is the lowest price that Division Sell could accept from Division Buy? (Assume that Division Buy wants to use a sole supplier and will not purchase less than 6,000 from a supplier. )

• A)$90.
• B)$84.
• C)$80.
• D)$66.

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Definitions:

Short-Term Notes Payable

Short-duration loans evidenced by promissory notes that a company must pay within a year or within its operating cycle, whichever is longer.