Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging

buys components from Production and assembles them for sale. Production sells many components to third parties in addition to

Packaging. Selected data from the two operations follow: $($refer to image$)$

a For Production, this is the price to third partles.

$b$ For Packaging, this does not Include the transfer price pald to Production.

Required:

a$.$ Current output in Production Is $25,150$ units. Packaging requests an additional $5,480$ units to produce a speclal order. What transfer

price would you recommend?

b$.$ Suppose Production Is operating at full capacity. What transfer price would you recommend?

c$.$ Suppose Production Is operating at $47,560$ units. What transfer price would you recommend?