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 elther to Division of the same company or to outside customers. Last year, the following activity occurred in Division A Selling price per circuit board 5 180 Variable cost per circuit board $ 127 Number of circuit boards: Produced during the year 21,200 Sold to outside customers 16,000 Sold to Division B 5,200 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 $660 each Required: 1 Calculate the net operating incomes earned by Division A Division B, and the company as a whole. 2 Assume Division As manufacturing capacity is 21,200 circuit boards Next year, Division Blwants to purchase 6.200 circuit boards from Division A rather than 5,200. (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 Total Company 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 21,200 circuit boards. Next year, Division B wants to purchase 6.200 circuit from Division A rather than 5,200. (Circuit boards of this type are not available from outside sources.) From the standpoint of 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 Sales Expenses Added by the division Transfer price paid Total expenses Net operating income 0 0 0 0 $ 0 $ 0$ Red Required 2 > 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 21,200 circuit boards. Next year, Division B wants to purchase 6.200 circuit board from Division A rather than 5,200. (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 Relpired 2 Assume Division A's manufacturing capacity is 21,200 circuit boards. Next year, Division B wants to purchase 6,200 circuit boards from Division A rather than 5,200. (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? Show less Continue to sell the additional 1,000 circuit boards to outside customers Sell the 1,000 additional circuit boards to Division 8