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algol [13]
3 years ago
8

Peppertree Company has two divisions, East and West. Division East manufactures a component that Division West uses. The variabl

e cost to produce this component is $1.45 per unit; full cost is $1.91. The component sells on the open market for $4.95. (Enter your answers in 2 decimal places.)Assuming Division East has excess capacity, what is the lowest price Division East will accept for the component?
Business
1 answer:
Anika [276]3 years ago
3 0

Answer:

$1.45

Explanation:

Data provided in the question

Variable cost per component = $1.45

Full cost = $1.91

Selling price per component = $4.95

By considering the above information, the lowest price that would be accepted for the component is equal to the variable cost per unit i.e $1.91 and plus the full cost includes both the variable and fixed cost plus the fixed cost would be recovered by normal sale also

So in this case we only considered the variable cost per component

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<u>Answer</u>:

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Hence, option D is the right answer.

<u>Explanation</u>:

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Upwellings are ocean currents which bring nutrients from deep cold water to the surface. Upwellings happen because of the rotation of the Earth and winds. The phytoplankton depend on the nutrients brought by the upwellings to prepare their food using sunlight and they form the food for various sea animals.

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