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Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp
Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $ 10.19 from an outside vendor. DivisionA needs 11,600 lamps for the coming year. Division B has the capacity to manufacture 50,700 lamps annually. Sales to outside customers are estimated at 39,100 lamps for the next year. Reading lamps are sold at $12.44 each. Variable costs are $ 7.22 per lamp and include $1.17 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $ 78,900 Consider the following independent situations. What should be the minimum transfer price accepted by Division B for the 11,600 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division B Maximum transfer price paid by Division A per unit per unit Suppose Division B could use the excess capacity to produce and sell externally 21,000 units of a new product at a price of $ 8.40 per unit. The variable cost for this new product is $ 5.64 per unit. What should be the minimum transfer price accepted by Division B for the 11,600 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division Bs per unit Maximum transfer price paid by Division A per unit If Division A needs 15,400 lamps instead of 11,600 during the next year, what should be the minimum transfer price accepted by Division B and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division B Maximum transfer price paid by Division A s per unit per unit
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