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: $ 191 $ 117 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 21,700 15,000 6,700 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 $290 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 21,700 circuit boards. Next year, Division B wants to purchase 7,700 circuit boards from Division A rather than 6,700. (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. Total Division B Division A $ 4,144,700 Company $ 8,298,700 X Sales $ 4,154,000 Expenses: Added by the division 2,538,900 4,481,900 Transfer price paid Total expenses 1,943,000 1,279,700 3,222,700 2,538,900 4,481,900 Net operating income $ 1,605,800 931,300 $ 3,816,800