Universal Foods sells can goods to grocery stores and uses some of the can goods at the corporate cafeteria. The cafeteria is a profit center. Canned green beans are sold to Kroger's Grocery Stores at 90¢ for a 32-oz. can. The Universal Foods cafeteria wants to 'pay' only 30¢ for the can. As the arbitrator in this dispute, you decide to:

Question

Quizplus · Accepted Answer

The correct decision is to go with 90¢ because it reflects the closest to a competitive market price for canned green beans. This ensures that the internal transactions are aligned with external market conditions, providing a more accurate reflection of the cafeteria's performance and profitability.

Universal Foods Sells Can Goods to Grocery Stores and Uses