Burt Inc. has a number of divisions, including the Birch Division, a producer of liquid pumps, and Maple Division, a manufacturer of boat engines.

Birch Division produces the h$20-$model pump that can be used by Maple Division in the production of motors that regulate the raising and lowering of the boat engine's stern drive unit. The market price of the h$20-$model is $$734,$ and the full cost of the h$20-$model is $$540.$

Required:

$1.$ If Burt has a transfer pricing policy that requires transfer at full cost:

What will the transfer price be$?$

$540$

Do you suppose that Birch and Maple divisions will choose to transfer at that price?

Maple Division :choose

Birch Division : refuse

$2.$ If Burt has a transfer pricing policy that requires transfer at market price:

What would the transfer price be$?$

$734$

Do you suppose that Birch and Maple divisions would choose to transfer at that price?

Maple Division choose?

Birch Division choose

$3.$ Now suppose that Burt allows negotiated transfer pricing and that Birch Division can avoid $$120$ of selling expense by selling to Maple Division.

Which division sets the minimum transfer price? B

What is the minimum transfer price?

$??$ i keep getting this wrong...its not $420$

Which division sets the maximum transfer price?

What is the maximum transfer price?

$734$

Do you suppose that Birch and Maple divisions would choose to transfer somewhere in the bargaining range? y