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 $182 Variable cost per circuit board $127 Number of circuit boards: Produced during the year 21,500 15,100 6,400 Sold to outside customers Sold to Division B 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 $260 in additional variable cost per instrument and then sold the instruments for $680 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 21,500 circuit boards. Next year, Division B wants to purchase 7.400 circuit boards from Division A rather than 6,400. (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. Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. Division A Division B Total Company $ 4.352.000 Sales Expenses: Added by the division: Transfer price paid Total expenses 0 0 Net operating income $ 0 $ 4352.000 $ Reguland 2