Division a Produces a Part with the Following Characteristics

question 169

Multiple Choice

Division A produces a part with the following characteristics: Division B, another division in the company, would like to buy this part from Division A. Division B is presently purchasing the part from an outside source at $28 per unit. If Division A sells to Division B, $1 in variable costs can be avoided. Suppose Division A is currently operating at capacity and can sell all of the units it produces on the outside market for its usual selling price. From the point of view of Division A, any sales to Division B should be priced no lower than:

• A) $27
• B) $29
• C) $20
• D) $28
• E) $21

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Definitions:

Culture Bound

Refers to the notion that behaviors and interpretations are strongly influenced by cultural context, making them difficult to apply universally.

Workers' Expectancies

Relates to the anticipations or beliefs workers hold about the outcomes of their efforts and how these beliefs influence their motivation and performance.

Clear Performance Goals

Specific, measurable, achievable, relevant, and time-bound objectives set to evaluate an individual's or organization's effectiveness and efficiency in achieving desired outcomes.

Valence

In psychology, the intrinsic attractiveness/goodness or averseness/badness of an event, object, or situation.