2 The Rossi Company is decentralized, and divisions are considered investment 12 centers. Rossi has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the (0 oak chairs and then purchases and attaches the seat cushions lim % (Click the icon to view additional information.) Read the requirements. er Contribution margin per unit Total contribution margin Requirement 1. Determine the total contribution margin for Rossi Company for the quarter. Chair Division 5) Cushion Division 0 Total 02 yr 86 Number of units one ushi n pu More info eter 3 - The Chair Division currently purchases the cushions for $30 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 500 chairs per quarter, and the Cushion Division is operating at capacity, which is 500 cushions per quarter. The two divisions report the following information: Chair Division Cushion Division Sales Price per Chair $ 95 Sales Price per Cushion $ 32 Variable Cost (other than cushion) 25 Variable Cost per Cushion 27 17 Variable Cost (cushion) 30 $ 40 $ 15 Contribution Margin per Chair Contribution Margin per Cushion Print Done Requirements 1. Determine the total contribution margin for Rossi Company for the quarter. 2. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Rossi Company? 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Rossi Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. - Xatie