Asked by Jaelyn Collins on Apr 25, 2024
Verified
Brull Products, Incorporated, has a Sensor Division that manufactures and sells a number of products, including a standard sensor. Data concerning that sensor appear below: The Safety Products Division of Brull Products, Inc needs 6,000 special heavy-duty sensors per year. The Sensor Division's variable cost to manufacture and ship this special sensor would be $60 per unit. Because these special sensors require more manufacturing resources than the standard sensor, the Sensor Division would have to reduce its production and sales of standard sensors to outside customers from 56,000 units per year to 46,400 units per year.From the standpoint of the Sensor Division, what is the minimal acceptable transfer price for the special sensors for the Safety Products Division?
A) $75.00 per unit
B) $77.00 per unit
C) $83.00 per unit
D) $96.80 per unit
Minimal Acceptable
The lowest standard or level that is considered satisfactory or acceptable.
Special Sensors
Custom or unique sensors designed for specific applications or environments, often used in advanced manufacturing, robotics, or environmental monitoring.
Sensor Division
A business unit within a company focused on the development, production, and sale of sensors, which are devices that detect and respond to changes in an environment.
- Ascertain the minimum transfer price acceptable by a division.
Verified Answer
$132 is equivalent to $96.80 per unit after rounding. Therefore, the answer is D.
Learning Objectives
- Ascertain the minimum transfer price acceptable by a division.
Related questions
Delemos Products, Incorporated Has a Transmitter Division That Manufactures and ...
Stokan Products, Incorporated, Has a Antennae Division That Manufactures and ...
Rohrer Products, Incorporated Has a Motor Division That Manufactures and ...
Division Delta of Golvin Corporation Makes and Sells a Single ...
The Southern Division of Barstol Company Makes and Sells a ...