=+Jamie: Well, you know as well as I that we are under strict profit responsibility in our

Question:

=+Jamie: Well, you know as well as I that we are under strict profit responsibility in our divisions, so I would expect to get market price, $150 for 100 semiconductors.

Dan: I’m not so sure we can swing that. I was expecting a price break from a “sister” division.

Jamie: Hey, I can only take this “sister” stuff so far. If I give you a price break, our profits will fall from last year’s levels. I don’t think I could explain that. I’m sorry, but I must remain firm—market price. After all, it’s only fair—that’s what you would have to pay from an external supplier.

Dan: Fair or not, I think we’ll pass. Sorry we couldn’t have helped.

Was Dan behaving ethically by trying to force the Semiconductor Division into a price break? Comment on Jamie’s reactions.

Fantastic news! We've Found the answer you've been seeking!

Step by Step Answer:

Related Book For  book-img-for-question

Accounting

ISBN: 978-1111001346

23rd Edition

Authors: Carl S. Warren

Question Posted: