1. Joanne Seton, the Engine Division manager of Allen Co. has approached Allen's Tractor Division manager Rod Knox about supplying engines for his division. Rod currently purchases his tractor engines for $1,800 from an outside supplier. The standard unit costs for the Engine Division are as follows: Direct materials Direct labor Variable overhead Fixed overhead 300 600 150 75 $1,125 Maximum capacity: 2500 units Customer demand: 1900 units Engine Division market price: $1,850 a. If Joanne has sufficient idle capacity to supply all of Rod's engine needs, what is the minimum price (floor price) she would be willing to sell the engines to Rod? b. What is the maximum price Rod would be willing to pay for an engine from c. What does Allen Co. stand to save if the internal transfer takes place? d. If Joanne offered Rod a transfer price of $1600, how much will Joanne gain? Joanne's division? How much will Rod save? e. If Joanne is operating at capacity, what is the minimum price she would be willing to sell the engines to Rod