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Aulman the has a number of disions including a Fumiture oivision and a Motel Division, The Motel Division ewns and operates a line of budget

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Aulman the has a number of disions including a Fumiture oivision and a Motel Division, The Motel Division ewns and operates a line of budget motels located along major highways. Each year, the Motei Division purchates fumiture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for s40. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Matel Dlvision. The full product cost of a dreiser is s29. While the Fumiture Division has been operating at capacity (50,000 dressers per year) and selling them for $40 each, it expects to produce and sell only 40,000 dressers for $40 each next year. The fumiture Division incurs variable costs of st9 ger dresser. The Motet Division needs 10,000 dressers per year; the Furniture Division can make up to 50,000 dressers per.year. The company policy is that all transfer prices are negotiated by the divisions involved. Required: 1. What is the maximum transfer price? Which division sets it? 2. What is the minimum transfer price? Which division sets it? 3. Suppose that the two divisions agree on a transfer price of \$31. What is the benefit for the Furniture Division? For the Moter Division? For Aulman Inci as a whole

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