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Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is
Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variable cost to produce this component is $1.54 per unit; full cost is $1.91. The component sells on the open market for $4.95. |
Assuming Division East has excess capacity, what is the lowest price Division East will accept for the component? | |||||||
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Assuming Division East has excess capacity, what is the highest price that Division West will pay for it? | |||||||||
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