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A Computer Store Regularly Advertises a Very Low Price for a Well-Known

question 142

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A computer store regularly advertises a very low price for a well-known brand of disks. When the customers come in, however, the salespeople point out the disadvantages of this particular brand and try to persuade them to buy other disks at much higher prices. This retailer is using:

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Definitions:

Supplying Division

The unit or segment within a larger organization responsible for providing materials, products, or services to another division or department.

Transfer Price

The price charged for goods and services transferred between departments or divisions of the same company or between related entities.

Buying Division

A department within a company responsible for purchasing goods, materials, and services required for the business operations.

Negotiated Transfer Price

A transfer price agreed upon by the selling and buying divisions within the same company.

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