Samuels Company has two divisions: Samuels Boots and Samuels Jellies. Samuels Bo
ID: 1948581 • Letter: S
Question
Samuels Company has two divisions: Samuels Boots and Samuels Jellies. Samuels Boots makes rubber soles, which it sells to Samuels Jellies and other companies. Samuels Boots has a capacity of 10 million bottles a year. Samuels Jellies currently has a capacity of 3 million rubber soles per year. Samuels Jellies has a fixed cost of $100,000 per year and a variable cost of $0.01/bottle. Samuels Boots can currently sell all of its output at $0.03/bottle.a. What should Samuels Boots charge Samuels Jellies for bottles so that both divisions will make appropriate decentralized planning decisions?
b. If Samuels Boots can only sell 5 million rubber soles to outside buyers, what should Samuels Boots charge Samuels Jellies for rubber soles so that both divisions will make appropriate decentralized planning decisions?
Explanation / Answer
Mrs. Piozzi, by her second marriage, was by her first marriage the Mrs. Thrale in whose house at Streatham Doctor Johnson was, after the year of his first introduction, 1765, in days of infirmity, an honoured and a cherished friend. The year of the beginning of the friendship was the year in which Johnson, fifty-six years old, obtained his degree of LL.D. from Dublin, and—though he never called himself Doctor—was thenceforth called Doctor by all his friends. Before her marriage Mrs. Piozzi had been Miss Hesther Lynch Salusbury, a young lady of a good Welsh family. She was born in the year 1740, and she lived until the year 1821. She celebrated her eightieth birthday on the 27th of January, 1820, by a concert, ball, and supper to six or seven hundred people, and led off the dancing at the ball with an adopted son for partner. When Johnson was first introduced to her, as Mrs. Thrale, she was a lively, plump little lady, twenty-five years old, short of stature, broad of build, with an animated face, touched, according to the fashion of life in her early years, with rouge, which she continued to use when she found that it had spoilt her complexion. Her hands were rather coarse, but her handwriting was delicate.
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