The Axle Division of Becker Company Produces Axles for Off-Road

question 45

Multiple Choice

The Axle Division of Becker Company produces axles for off-road sport vehicles.One-third of Axle's output is sold to an internal division of Becker;the remainder is sold to outside customers.Axle's estimated operating profit for the year is: The internal division has an opportunity to purchase 10,000 axles of the same quality from an outside supplier on a continuing basis.The Axle Division cannot sell any additional products to outside customers.What is the minimum selling price that Axle should accept from the internal division?

• A)$10.00.
• B)$13.00.
• C)$15.00.
• D)$50.00.