Whitney Company treats each division as a profit center and expects a 20 percent profit on its total production costs.Division A produces a part that it sells externally for $19.00.It also supplies this part to other internal divisions.Its production cost for the part is $13.70.
-Using a negotiated-price approach,what is the negotiation floor for Division A?

Question

Quizplus · Accepted Answer

The negotiation floor for Division A would be its production cost of $13.70, as this is the minimum price at which it would be willing to sell the part to cover its costs.

Whitney Company Treats Each Division as a Profit Center and Expects