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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 $ 9.60 from an outside vendor. Division A needs 11, 500 lamps for the coming year. Division B has the capacity to manufacture 50, 300 lamps annually. Sales to outside customers are estimated at 38, 800 lamps for the next year. Reading lamps are sold at $ 11.62 each. Variable costs are $ 6.83 per lamp and include $ 1.44 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 $ 79, 900. Consider the following independent situations. What should be the minimum transfer price accepted by Division B for the 11, 500 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
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