Intracompany Sales. Nally Enterprises has three divisions: Fisk, Nied, and Zale. One of the products sold by Zale requires parts made by Fisk and Nied. Data on the product from Zale are as follows:

.Fisk charges Zale \(\$ 26\) per unit. Nied charges Zale \(\$ 20\) per unit. These prices are full manufactured cost plus \(\$ 2\) per unit markup. Fixed costs applied to the finished product are incurred equally by the three divisions.
Zale routinely gets outside bids on all parts used. Recent valid quotes were \(\$ 21\) per unit on the part made by Fisk and also \(\$ 21\) per unit on the Nied part.
\section*{Required:}
1. Based on the preceding data, what profits are reported by each division?
2. What should be considered the maximum and minimum transfer prices for the Fisk and Nied parts?

(a) What objective(s) would be met by the maximum price? Why?

(b) What objective(s) would be met by the minimum price? Why?

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Selling price... Variable costs: Fisk costs.. Nied costs Zale costs Contribution margin Factory fixed costs (based on volume of 10,000 units) Profit.... $70 $18 12 8 38 $32 18 $14