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Cranston Manufacturing makes a variety of products, including lawn mowers. Cranston's Lawn Mower Division can use a component, 32, manufactured by Cranston's Electrical Division. The
Cranston Manufacturing makes a variety of products, including lawn mowers. Cranston's Lawn Mower Division can use a component, 32, manufactured by Cranston's Electrical Division. The market price for K32 is $22 per unit. The variable cost per unit for K32 in the Electrical Division is $8, while the absorption cost per unit is $14. The divisions at Cranston use a negotiated price strategy to set transfer prices betweer divisions. The Electrical Division has excess capacity. Cranston's Lawn Mower Division can use a component, K32 What is the lowest acceptable transfer price to the Electrical Division? What is the highest acceptable transfer price that the Lawn Mower Division would pay? Explain your answer | is the lowest acceptable transfer price to the Electrical Division | is the highest acceptable transfer price that the Lawn Mower Division would pay
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