Collyer Products inc. has a Valve Division thet manufactures and sells a standard valve as follows: The company has a Pump Division that could use this valve in the manufacture of one of its pumps. The Pump Division is currently purchasing 14,000 valves per year from an overseas supplier at a cost of $24 per valve. Required: 1. Assume that the Valve Division has ample idie capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? 2. Assume that the Valve Division is selling all that it can produce to outside customers on the intermediate market What is the minimum transfer price acceptable to the Valve Division for transfers to the Pump Division? 3. Assume again that the Valve Division is selling all that it can produce to outside customers on the intermediate market Also assume that $3 in variable expenses can be avoided on transfers within the company, due to reduced selling costs. What is the acceptable range, if any, for the transfer price between the two divisions? 4. Assume the Pump Division needs 40,000 special high-pressure valves per year. The Valve Divisions variable costs to manufacture and ship the special valve would be $14 per unit. To produce these special valves, the Valve Dwision would hove to reduce its production and sales of regular valves from 300,000 units per year to 240,000 units per year. As far as the Valve Division is concerned, Whot is the lowest acceptoble transfer price? (Round your answer to 2 decimal places.) Collyer Products inc. has a Valve Division thet manufactures and sells a standard valve as follows: The company has a Pump Division that could use this valve in the manufacture of one of its pumps. The Pump Division is currently purchasing 14,000 valves per year from an overseas supplier at a cost of $24 per valve. Required: 1. Assume that the Valve Division has ample idie capacity to handle all of the Pump Division's needs. What is the acceptable range, if any, for the transfer price between the two divisions? 2. Assume that the Valve Division is selling all that it can produce to outside customers on the intermediate market What is the minimum transfer price acceptable to the Valve Division for transfers to the Pump Division? 3. Assume again that the Valve Division is selling all that it can produce to outside customers on the intermediate market Also assume that $3 in variable expenses can be avoided on transfers within the company, due to reduced selling costs. What is the acceptable range, if any, for the transfer price between the two divisions? 4. Assume the Pump Division needs 40,000 special high-pressure valves per year. The Valve Divisions variable costs to manufacture and ship the special valve would be $14 per unit. To produce these special valves, the Valve Dwision would hove to reduce its production and sales of regular valves from 300,000 units per year to 240,000 units per year. As far as the Valve Division is concerned, Whot is the lowest acceptoble transfer price? (Round your answer to 2 decimal places.)
