Division 1 of Ace Company Makes and Sells Wheels That

question 9

Multiple Choice

Division 1 of Ace Company makes and sells wheels that can either be sold to outside customers or transferred to Division 2. The following data are available from last month:

Division 1:

Division 2:

If Division 1 sells the wheels to Division 2, Division 1 can avoid $2 per unit in sales commissions.

-Suppose that Division 1 sells 11,500 units each month to outside customers. According to the formula in the text, what is the lowest acceptable transfer price from the viewpoint of the selling division?

• A)$47.00 per unit
• B)$43.50 per unit
• C)$37.50 per unit
• D)$34.73 per unit

---

Definitions:

Symbolic Interaction

Refers to the process by which individuals use symbols and language to interact and communicate, creating shared meanings.

Herbert Blumer

An American sociologist known for developing Symbolic Interactionism, a theory that examines how individuals create meanings through social interaction.

Gestures

Non-verbal communication actions performed with parts of the body, often the hands, to convey messages or emotions.

Sheldon Stryker

An influential sociologist known for his work on identity theory, emphasizing the role of social structures in shaping individual identity through internalized societal roles.