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The Greco Company is decentralized, and divisions are considered investment centers. Greco has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions (Click the icon to view additional information.) Read the reguirements Requirement 1. Determine the total contribution margin for Greco Company for the quarter Number of units x Contribution margin per unit Total contribution margin Chair Division Cushion Division Total Requirement 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? Number of units Contribution margin per unit Total contribution margin x = Chair Division Cushion Division Total Requirement 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? (Enter "O" for any zero amounts.) (Click the icon to view additional information.) Read the requirements Number of units x Contribution margin per unit Total contribution margin = Chair Division Cushion Division Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Greco Company? The best option for Greco is By having the Chair Division purchase the cushions from an outside vendor, the company would generate in total contribution margin than if the division purchases cushions internally Requirement 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 the current scenario (Requirement 1). for the Chair Division to purchase cushions internally at the current sales price (Requirement 2) for the Chair Division to purchase cushions internally at the current variable cost (Requirement 3) quarter. What transfer price should Greco Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. Greco Company should set the transfer price at S because the Chair Division would not be willing to pay more than Using the transfer price you determined, calculate the total contribution margin for the quarter. Number of units x Contribution margin per unit Total contribution margin = Chair Division Cushion Division-external Cushion Division-internal Total