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Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 25,000 units

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Avery Company has two divisions, Polk and Bishop. Polk produces an item that Bishop could use in its production. Bishop currently is purchasing 25,000 units from an outside supplier for $16 per unit. Polk is currently operating at less than its full capacity of 610,000 units and has variable costs of $9 per unit. The full cost to manufacture the unit is $13. Polk currently sells 440,000 units at a selling price of $19 per unit. a. What will be the effect on Avery Company's operating profit if the transfer is made internally? 2 00:4847 .. b. What is the minimum transfer price from Polk's perspective? Minimum Transfer Price c. What is the maximum transfer price from Bishop's perspective? Madmum Transfer Price

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