Register
Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $1.58 per unit; full cost is $1.98. The
52.1k views
1 vote
Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $1.58 per unit; full cost is $1.98. The component sells on the open market for $5.07. Assuming Division East has excess capacity, what is the lowest price Division East will accept for the component

User Hemant Singh
by
5.2k points

1 Answer

4 votes

Answer:

$5.07

Step-by-step explanation:

The Division East is manufacturing a component that the Division West uses. Since managers of these divisions are evaluated separately on the performance of their divisions,Division East will accept at minimum the price equal to that on that its output is fetching in an open market.

User Svth
by
5.8k points
Ask a Question
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

5.8m questions

7.6m answers

Other Questions

_____ reminds customers and clients that they made a good choice in selecting a company with which to do business, or it reminds them of the good qualities of their purchase.​
On august 1 the darius co. purchased a photocopy machine for $8,000. the estimated annual depreciation on the machine is $1,680. if the company prepares annual financial statements on december 31, the
When president obama was elected, the u.s. economy was in trouble, and has slid into a recession. consumer spending was low and getting worse. in an effort to stop the decline, president obama proposed
Ensuring that an individual is who they claim to be is the function of _____. select one: a. confidentiality b. authorization c. availability d. authentication e. nonrepudiation
The current market price for good y is above the equilibrium price, and then the price of a subsitute good, x, increases. the demand curve for good y shifts as a result. what is the likely outcome of the
Link Copied!