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Leapin' Larry's Pre-Owned Cars has two divisions, Operations and Financing. Operations is responsible for selling Larry's inventory as quickly as possible and purchasing cars for future sale. Financing Division takes loan applications and packages loans into pools and sells them in the financial markets. It also services the loans Both divisions meet the requirements for segment disclosures under accounting rules Operations Division had $20 million in sales last year. Costs, other than those charged by Financing Division, totaled 514 million. Financing Division eamed revenues of $5 million from servicing loans and incurred outside costs of 56 million. In addition, Financing charged Operations $4 million for loan-related fees Operations s manager complained to Larry that Financing was charging twice the commercial rate for loan-related fees and that Operations would be better off sending its buyers to an outside lender Financing's manager replied that although commercial rates could be lower, servicing Larry's loans is more difficult, thereby justifying the higher fees Required: a. What are the reported segment operating profits for each division ignoring income taxes and using the $4 million transfer price for the loan-related fees? (Enter your answers in millions.) Operating profits Operation Division Financing Division b. What are the reported segment operating profits for each division, ignoring income taxes and using a $2 million commercial rate as the transfer price for the loan-related fees? (Enter your answers in millions.) Operating profits Operation Division Financing Division Clinton Corporation has two decentralized divisions, Alpha and Beta Alpha always has purchased certain units from Beta at $90 per unit. Beta plans to raise the price to $126 per unit, the price it receives from outside customers. As a result, Alpha is considering buying these units from outside suppliers for $90 perunt Bela's costs follow Vanable costs per unit Annual fixed costs Annual production of these units sold to Alpha soil to Alpha $160,083 14.000 units Required: a. If Alpha buys from an outside supplier the facilities that Bela uses to manufacture these units will remain idle What will be the result if Clinton enforces a transfer price of $125 per unit between Alpha and Bela? Cinton Corporation's contribution margin would b. Suppose Clinton enforces a transfer price of $90 and insists that Beta sell to Alpha before selling to outside customers. Beta currently operates at capacity and can easily sell the units it sells to Alpha on the outside market. What cost will Clinton incur as a result of this policy? Cost