Division D Has Asked Division C of the Same Company

question 48

Multiple Choice

Division D has asked Division C of the same company to supply it with 4,000 units of part L763 this year to use in one of products. Division D has received a bid from an outside supplier for the parts at a price of £26.00 per unit. Division C has the capacity to produce 15,000 units of part L763 per year. Division C expects to sell 12,000 units of part L763 to outside customers this year at a price of £29.00 per unit. To fill the order from Division D, Division C would have to cut back its sales to outside customers. Division C produces part L763 at a variable cost of £20.00 per unit. The cost of packing and shipping the parts for outside customers is £1.00 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division D.
-The minimum transfer price for Division D is

• A)£23
• B)£22
• C)£19
• D)£16

---

Definitions:

God

A supreme being or deity worshiped in various religions, characterized by attributes of omnipotence, omniscience, and benevolence.

Heart Surgeries

Medical procedures performed on the heart or vessels, typically to correct congenital heart defects, treat ischemic heart disease, or repair valvular heart disease.

Connection to Religion

The personal or communal relationship individuals or groups have with their faith or spiritual beliefs, which influences their worldview and lifestyle.

Edna

a given name, possibly referring to a specific person, character, or entity, without additional context, its specific significance may vary.