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tion list K uestion 3 Uestion 4 Ire is WS. The Tire Divion has Ge iolowing costs por the: Pead the mourments: conchision eothi] The twe Disions More info Ruirements tire is SES The Tre Divieion has the tolowing costs per tire: (i) (click the loon to viow the costs and additional inlomation) Read the requirements: Requirement 1. Assume that the Tire Division has excess capaoty, meaning that it can produce fires for the fractor Division without giving up any of tra curtent fire anles to cutsiders. If Ginely cobversion conlis) The lowent acoupuble transfer pice is The Tre Divion's Rquirements 1. Assume that the Tre Oivion has encess capacify mearing thut it can produce fres for ine $24 What would the transier price be? ead coul for the year is oxpected to totas $114,000. The Tre Oxition ooo tres tha year. The fieed manulacturng overhead per tire is 5 ? po treas. lo usel Whas would te the transter pnce in this case? Direct material cost per tire $24 Conversion costs per tire $6 (Assume the $6 includes only the variable portion of conversion costs.) Fixed manufacturing overhead cost for the year is expected to total $114,000. The Tire Division expects to manufacture 57,000 tires this year. The fixed manufacturing overhead per tire is $2 ( $114,000 divided by 57,000 tires). Requirements 1. Assume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Greely Motors has a negotiated transfer price policy, what is the fowest acceptable transfer price? What is the highest acceptable transfer price? 2. If Greely Motors has a cost-plus transfer price policy of full absorption cost plus 25%, what would the transfer price be? 3. If the Tire Division is currently producing at capacity (meaning that it is selling every single tire it has the capacity to produce), what would likely be the fairest transfer price strategy to use? What would be the transfer price in this case