TrueValue Company makes all types of office desks. The General Desk Division is currently producing and selling desks called General per year, which is the yearly demand for this type of desk. The General Desk Division has a capacity of desks.The variable costs assigned to each desk are $ and annual fixed costs of the division are $ The General desk sells for $The Executive Division wants to buy General desks at $ for its custom office design business. Executive Division buys either all desks from General Division or none. Suppose the Executive Division can sell the desks in the outside market for $ after incurring additional costs of $ per desk.Suppose each division wishes to maximize their division profits.a Is it optimal for the General Desk Division to accept the order from the Executive Division?Pental CLICK b From the perspective of the company as a whole should the order be accepted?How much does firmwide profit change if the order is accepted?c What is the optimal transfer price per unit? Does this price achieve goal congruence?

D assume now that the capacity of the General Deak Division is desks. Using the general price formula, what is the optimal transfer price per unit?

Answer rating: 100% (QA)

a Is it optimal for the General Desk Division to accept the order from the Executive Division To determine whether the General Desk Division should ac... View the full answer