What do the authors suggest about using data that was not specifically gathered to test the hypothesis?
a. It can be discarded as it will not address the issue at hand.
b. It should not be ignored. Keep track of everything.
c. It should be kept if it is positive information.
d. Discard it unless there is a minimum of six pieces of information saying the same thing.
b. It should not be ignored. Keep track of everything.
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A value-based pricing strategy most likely begins with ________.
A) assessing customer needs B) designing a stylish product C) evaluating the product's costs D) promoting the product's benefits E) setting a price based on perceived value
A pay strategy is a source of competitive advantage:
A. if it offers stock options. B. if it defers taxes. C. if it rarely aligns. D. if it differentiates. E. if it seldom provides value.
A business plan can be thought of as a
A. crystal ball picture. B. money plan. C. contingency plan. D. game plan.
One of the divisions in Milsap Manufacturing Company is the Camera Division. The Camera Division is developing a new product that would require a lens not commercially available. The Camera Division believes it can sell 40,000 units of the new product each year at a selling price of $120. Variable costs for the new product would be $60, not including the lens, and there will be $160,000 of incremental fixed costs associated with the product. The Camera Division does not have the expertise to make the lenses. Milsap Manufacturing Company has a Lens Division that could make the lenses and has sufficient idle capacity. It estimates the variable cost per unit would be $16 and incremental fixed costs would be $120,000 each year.Required:1) There are different bases that can be used in setting
transfer prices, including market prices. What basis should be used in this situation? 2) What is the maximum transfer price Camera Division should be willing to pay? Note that, without the lenses, the Camera Division cannot make and sell its new product. 3) What is the minimum transfer price that Lens Division should be willing to accept? 4) Should the transfer be made? If not, why not? If so, what transfer price (or range of transfer prices) would you recommend? What will be an ideal response?