Toldness Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below: The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector.
What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?
A) $51 per unit
B) $58 per unit
C) $22 per unit
D) $29 per unit

Question

Toldness Products, Inc., has a Connector Division that manufactures and sells a number of products, including a standard connector that could be used by another division in the company, the Transmission Division, in one of its products. Data concerning that connector appear below:  The Transmission Division is currently purchasing 11,000 of these connectors per year from an overseas supplier at a cost of $58 per connector.
What is the maximum price that the Transmission Division should be willing to pay for connectors transferred from the Connector Division?
A) $51 per unit 
B) $58 per unit 
C) $22 per unit 
D) $29 per unit

Quizplus · Accepted Answer

The Answer is B