Essay
Creaser Products,Inc.,has a Sensor Division that manufactures and sells a number of products,including a standard sensor.Data concerning that sensor appear below:
The company has a Safety Products Division that could use this sensor in one of its products.The Safety Products Division is currently purchasing 8,000 of these sensors per year from an overseas supplier at a cost of $76 per sensor.
Required:
The Sensor Division is selling all of the sensors it can produce to outside customers.Also assume that $10 in variable expenses can be avoided on transfers within the company due to reduced shipping and selling costs.What is the acceptable range,if any,for the transfer price between the two divisions?
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