Steinhoff Products, Incorporated, Has a Sensor Division That Manufactures and Sells

Steinhoff Products, Incorporated, has a Sensor Division that manufactures and sells a number of products, including a standard sensor that could be used by another division in the company, the Safety Products Division, in one of its products. Data concerning that sensor appear below: The Safety Products Division is currently purchasing 4,000 of these sensors per year from an overseas supplier at a cost of $48 per sensor.What is the maximum price that the Safety Products Division should be willing to pay for sensors transferred from the Sensor Division?

A) $51 per unit
B) $37 per unit
C) $48 per unit
D) $14 per unit

Correct Answer:

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