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8. Division produces a small motor that can be used in Division B's final product. B has been purchasing the motor from Co. O for

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8. Division produces a small motor that can be used in Division B's final product. B has been purchasing the motor from Co. O for $84/unit. Division S's manager has approached the manager of Division B about selling these motors to Division B. Division Sincurs these unit costs: Direct materials $16, Direct labor $8, Variable overhead $6, Fixed overhead $24 Currently, Division Scan produce 150,000 motors but is only producing 120,000. Div. B needs 20,000 units per year. The maximum/minimum transfer price should be respectively a $84/30 C. $84/54 b. $54/24 d $30/24 I 9. Refer to question 8. Suppose Divisions S and B agree on a transfer price of $60. What is the benefit to each division respectively? a $600,000/$480,000 c. $480,000/S600,000 b. $1,080,000/$0 d. $0/$1,080,000 10.-Refer to question 8. If S is at full capacity, the transfer price should be: a. Between $30 and $84 c. $30 b. $84 d. $54

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