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CP 8-1 Ethics and professional conduct in business C.S. Technology Company has two divisions, the Semiconductor Division and the PC Divi-sion. The PC Division may
CP 8-1 Ethics and professional conduct in business C.S. Technology Company has two divisions, the Semiconductor Division and the PC Divi-sion. The PC Division may purchase semiconductors from the Semiconductor Division or from outside suppliers. The Semiconductor Division sells semiconductor products both internally and externally. The market price for semiconductors is $100 per 100 semicon-ductors. Frank Hoffman is the controller of the PC Division, and Lisa Henderson is the controller of the Semiconductor Division. The following conversation took place between Frank and Lisa: Fronk: 1 hear you are having problems selling semiconductors out of your division. Maybe I can help. Lisa: You've got that right. We're producing and selling at about 90% of our capacity to outsiders. Last year we were selling 100% of capacity. Would It be possible for your division to pick up some of our excess capacity? After all, we are part of the same company. Frank: What kind of price could you give me? Lisa: 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, $ 100 for 100 semiconductors. Frank: I'm not so sure we can swing that. I was
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