Exercise 11-7 (Algo) Transfer Pricing from the Viewpoint of the Entire Company [LO11-3] Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board Variable cost per circuit board Number of circuit boards: Produced during the year Sold to outside customers Sold to Division B $ 185 $ 128 20,700 15,800 4,900 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in an electronic instrument manufactured by that division (one board per instrument). Division B incurred $210 in additional variable cost per instrument and then sold the instruments for $620 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,700 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required 11 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Sales Expenses Added by the division Division A Division B Total Company Transfer price paid Total expenses 0 0 0 Net operating income $ 0 $ $ Required 1 Required 2 > Complete this question by entering your answers in the tabs below. Required 1 Required 2 Assume Division A's manufacturing capacity is 20,700 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers? Continue to sell the additional 1,000 circuit boards to outside customers Sell the 1,000 additional circuit boards to Division B. Show less A Saved Help Save & Exit Submit Check my work 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,700 circuit boards. Next year, Division B wants to purchase 5,900 circuit boards from Division A rather than 4,900. (Circuit boards of this type are not available from outside sources.) From the standpoint of the company as a whole, should Division A sell the 1,000 additional circuit boards to Division B or continue to sell them to outside customers