Business, 11.07.2019 23:40 mxhx

Henderson company manufactures electronics. the calculator division (an investment center) manufactures handheld calculators. the division can purchase the batteries used in the calculators from the battery division (another investment center) or from an outside vendor. the cost to purchase batteries from the outside vendor is $5. the transfer price to purchase from the battery division is $6. the battery division also sells to outside customers. the sales price is $6, and the variable cost is $3. the battery division has excess capacity.
should the calculator division purchase from the battery division or the outside vendor?
a. the calculator division should purchase from the outside vendor as long as the transfer price is $5.00 or less because the battery divison has excess capacity.
b. the calculator division should purchase from the battery division as long as the transfer price is $5.00 or less because the battery division has excess capacity.
c the calculator division should purchase from the battery division as long as the transfer price s s6.00 or less because the battery dison has excess capacity.
d the calculator division should purchase from the outside vendor as long as the transfer price is $3.00 or more because the battery division is operating at capacity.

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