Question

1. To compete on the basis of price, the seller must carefully manage

Select one:

A. operating and maintenance costs.

B. communications between buyer and seller.

C. timely delivery and customer support.

D. the degree to which products or services meet customer's needs.

2. Joliet Division has the capacity to make 1,500 units of an intermediate good that is sold both internally and on the open market for a price of $32 each. To make the product, Joliet incurs $7 of variable cost per unit and $12 of fixed costs per unit.

What is the minimum price Joliet would accept for an internal transfer of 1,000 units of the product if the division is operating at 100% capacity?

Select one:

A. $32.00 each

B. $ 7.00 each

C. $19.00 each

D. $30.00 each

Answer 1

1.) A.Operating and maintenance charge

Reason - When to compete on basis of price, buyer must concentrate on reducing the cost so that the buyer can sale it in such a way to maximise its profit.

2.) C. $19.00 each

​​​​​​Reason - Minimum price is the lowest selling price set by the producer to the produced goods.For a certain surety, And in this maximum cost on each production is $19 , so by setting the minimum cost to $19 Joilet will accept any transfer.

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