4) instructions:

required:

Garcon Inc. manufactures electronic products, with two operating divisions, Consumer and Commercial. Condensed divisional income statemente, which involve no intracompany transfers and which include a breakdown of expenses into variable and fixed components, are as followsh conyersion expenses ncurred within the Commercial Division. The Consumer Division is presently producing 14,400 units out of a total capacity of 17.280 units. Materials used in producing the Commercial Division's product are currently purchased from outada suppliers at a price of 5150 par unit. The Consumer Division is able to produce the materials used by the Commercial Division. Except for the possible transfer of materials betveen divisions. no changes are expected in sales and experises. 3. Prepare condensed divisional income statements for Garcon Inc, based on the data in part (2). 5b. Assuming that the managers of the two divisions cannot agree on a transfer price, what price would you suggest as the transfer price