Coronado Corporation manufactures car stereos. It is a division of Sunland Motors, which manufactures vehicles. Coronado sells car stereos to Sunland, as well as to other vehicle manufacturers and retail stores. The following information is available for Coronado's standard unit: variable cost per unit $33, fixed cost per unit $19, and selling price to outside customer $99. Sunlandcurrently purchases a standard unit from an outside supplier for $94. Because of quality concerns and to ensure a reliable supply, the top management of Sunland has ordered Coronado to provide 165,000 units per year at a transfer price of $31 per unit. Coronado is already operating at full capacity. Coronado can avoid $2 per unit of variable selling costs by selling the unit internally.

Answer each of the following questions

Coronado Corporation manufactures car stereos. It is a division of Sunland Motors, which manufactures vehicles. Coronado sells car stereos to Sunland, as well as to other vehicle manufacturers and retail stores. The following information is available for Coronado's standard unit: variable cost per unit $33, fixed cost per unit $19, and selling price to outside customer $99. Sunland currently purchases a standard unit from an outside supplier for $94. Because of quality concerns and to ensure a reliable supply, the top management of Sunland has ordered Coronado to provide 165,000 units per year at a transfer price of $31 per unit. Coronado is already operating at full capacity. Coronado can avoid $2 per unit of variable selling costs by selling the unit internally. Answer each of the following questions. (a) Your answer is correct. What is the minimum transfer price that Coronado should accept? Minimum transfer price $ 97 What is the potential loss to the corporation as a whole resulting from this forced transfer? Potential loss $