1. Assume a company has only one service department and two operating departments (A and B). The service departments budgeted and actual variable costs for the period were $80,000 and $88,000, respectively. The budgeted and actual units of service provided to the operating departments were as follows:

	Budgeted Units of Service	Actual Units of Service
Department A	16,000	15,700
Department B	24,000	27,000
Total	40,000	42,700

The service departments variable costs that should be charged to Department A are closest to:

2. Assume a company has only one service department and two operating departments (A and B). The service departments budgeted and actual variable costs for the period were $80,000 and $88,000, respectively. The budgeted and actual units of service provided to the operating departments were as follows:

	Budgeted Units of Service	Actual Units of Service
Department A	16,000	15,000
Department B	24,000	26,900
Total	40,000	41,900

How much of the service departments variable costs should not be charged to either Department A or B?

3. Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market:

Selling price per unit (on the outside market)	$ 101.00
Variable cost per unit	$ 61.00
Fixed costs per unit (based on capacity)	$ 10.00
Capacity in units	30,000

Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. If Division A is currently selling 27,000 units on the outside market, what is the lowest acceptable transfer price for Division A if it were to sell 5,000 units to the other division?

4. Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market:

Selling price per unit (on the outside market)	$ 100
Variable cost per unit	$ 64
Fixed costs per unit (based on capacity)	$ 10
Capacity in units	30,000

Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. The other division can either agree to a transfer price with Division A or purchase a comparable product on the outside market for $100. If Division A is currently selling 25,500 units on the outside market, what is the range of acceptable transfer prices between the two divisions?

5. Assume Division A has provided the following information regarding the one product that it manufactures and sells on the outside market:

Selling price per unit (on the outside market)	$ 100
Variable cost per unit	$ 65
Fixed costs per unit (based on capacity)	$ 6
Capacity in units	30,000

Division A has been offered the opportunity to sell 5,000 units of its only product to another division within the same company. The other division can either agree to a transfer price with Division A or purchase a comparable product on the outside market for $100. If Division A is currently selling 26,000 units on the outside market and the other division chooses to buy 5,000 units on the outside market (rather than agreeing to a transfer price with Division A), what is the impact on profits for the company as a whole?