Question: . + Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company's X-ray Division uses
. + Sembotix Company has several divisions including a Semiconductor Division that sells semiconductors to both internal and external customers. The company's X-ray Division uses semiconductors as a component in its final product and is evaluating whether to purchase them from the Semiconductor Division or from an external supplier. The market price for semiconductors is $100 per 100 semiconductors, Dave Bryant is the controller of the X-ray Division, and Howard Hillman is the controller of the Semiconductor Division. The following conversation took place between Dave and Howard: Dave: I hear you are having problems selling semiconductors out of your division. Maybe I can help Howard: You've got that right. We're producing and selling at about 90% of our capacity to outsiders. Last year, we were selling 100% of capacity. Would it be possible for your division to pick up some of our excess capacity? After all, we are part of the same company Dave: What kind of price could you give me? Howard: Well, you know as well as that we are under strict proft responsibility in out divisions, so I would expect to get market price, $100 for 100 semiconductors Dave: I'm not so sure we can swing that I was expecting a price break from a sister" division, Howard: Hey, I can only take this sister' stuff so far, I give you a price break. our profits will fall from last year's levels. I don't think I could explain that. I'm sorry, but I must remain fem-market price. After all, it's only fair--that's what you would have to pay from an external supplier Dave: Fair or not. I think well pass. Sorry we couldn't have helped Is Dave behaving unethically by trying to force the Semiconductor Division into a price break? Comment on Howard's reactions. Write a paragraph
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
