(Click the icon to view additional information.) The Coley Company is decentralized, and divisions are considered investment centers. Coley 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. Read the requirements - Requirement 1. Determine the total contribution margin for Coley Company for the quarter. More info Number of units X Contribution margin per unit Total contribution margir Chair Division Cushion Division The Chair Division currently purchases the cushions for $18 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1.200 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,200 cushions per quarter. The two divisions report the following information: Total Requirement 2. Assume the Chair Division purchases the 1,200 cushions needed from the Cushion Division at Chair Division Cushion Division Number of units X Contribution margin per unit Total contribution margir $ $ 26 Sales Price per Chair Variable Cost (other than cushion) Chair Division 85 Sales Price per Cushion 35 Variable Cost per Cushion 18 10 Cushion Division Variable Cost (cushion) Total $ 32 $ 16 Contribution Margin per Chair Contribution Margin per Cushion Requirement 3. Assume the Chair Division purchases the 1,200 cushions needed from the Cushion Division at i mounts.) Number of units x Contribution margin per unit = Total contribution margir Chair Division X Print Done Cushion Division Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Coley Company? The host antion for Colovic Click the icon to view additional information.) The Coley Company is decentralized, and divisions are considered investment centers. Coley 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. Read the requirements Requirement 1. Determine the total contribution margin for Coley Company for the quarter. Number of units Contribution margin per unit Total contribution margin Chair Division Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1,200 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 Chair Division Cushion Division Total Requirement 3. Assume the Chair Division purchases the 1,200 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? (Enter "0" for any zero amounts.) Number of units X Contribution margin per unit Total contribution margin Chair Division Cushion Division X Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Coley Company? The host antion for Colovic Click the icon to view additional information.) The Coley Company is decentralized, and divisions are considered investment centers. Coley 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. Read the requirements. Number of units 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 Coley Company? The best option for Coley 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 2,400 cushions per quarter and can continue to supply its outside customers with 1,200 cushions per quarter and also supply the Chair Division with 1,200 cushions per quarter. What transfer price should Coley Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. Coley Company should set the transfer price at 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 Contribution margin per unit Total contribution margin Chair Division Cushion Division-external X Cushion Division-internal - Total