Determining Market-Based and Negotiated Transfer Prices Carreker, Inc., has a number of divisions, including the Alamosa Division, producer of surgical blades, and the Tavanis Dlvision, a manufacturer of medical instruments. Alamosa Division produces a 2.5cm steel blade that can be used by Tovaris Division in the production of scalpels. The market price of the blade is $2.3. Cost informabion for the blade is: Tavaris needs 19,000 units of the 2.5cm blade per year, Alamosa Division is at full capacity (90,000 units of the bisde). Requiredt 1. If Carreker, Inc., has a transfer pricing policy that requires transfer at market price, what would the transfer price be? per unit Do you suprbse that Alamosa and Tavaris divisions would choose to transfer at that price? 2. Now suppose that Carreker, Inic, allows negotiated transfer pricing and that Alamosa Division can avoid $1.55 of selling and distribution expense by seling to Tavaris Division. Which division sets the minimum transfer price, and what is it? Round your answers to the nearest cent, if needed. Which division sets the maximum transfer price, and what is it? 5 per unit Do you suppose that Alamosa and Tavaris divisions would choose to transfer somewhere in the bargaining range? Tavaris nceds 19,000 units of the 2.5cm blade per year. Alamosa Division is at full capacity (90,000 units of the blade). Required: 1. If Carreker, Inc., has a transfer pricing policy that requires transfer at market price, what would the transfer price be? per unit Do you suppose that Alamosa and Tavaris divisions would choose to transfer at that price? 2. Now suppose that Carrekec, Inc., allows negotiated transfer pricing and that Alamosa Divisian can avold $1.55 of selling and distribution expense by selling to Tavaris Division, Which division sets the minimum transfer price, and what is it? Round your answers to the nearest cent, if needed. per unit Which division sets the maximum transfer price, and what is it? Do you suppose that Alamosa and Tavaris divisions would choose to transfer somewhere in the bargaining range? 3. What if Alamosa Division plans to produce and sell only 68,000 units of the 2,5cm blade next year? Which division sets the minimum transfer price, and what is it? Round your answers to the nearest cent, if needed. per unit Which division sets the maximum transfer price, and what is it? per unit Do you suppose that Alamosa and Tavaris divisions would choose to transfer somewhere in the bargaining range