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Exercise 11-7 (Algo) Transfer Pricing from the Viewpoint of the Entire Company [LO11-3) 23 Boints 023741 Hint Division A manufactures electronic circuit boards. The boards

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Exercise 11-7 (Algo) Transfer Pricing from the Viewpoint of the Entire Company [LO11-3) 23 Boints 023741 Hint Division A manufactures electronic circuit boards. The boards can be sold either to Division of the same company or to outside B customers. Last year, the following activity occurred in Division A: Selling price per circuit board $ 182 Variable cost per circuit board $ 113 Number of circuit boards: Produced during the year 21,000 Sold to outside customers 14,300 Sold to Division B 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 $250 in additional variable cost per instrument and then sold the instruments for $640 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 21,000 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 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? Print Complete this question by entering your answers in the tabs below. Required 1 Required 2 burinn in the mamiwhole 7 2. Assume DIVISION As manufacturing capacity is 21,000 Circuit boards. Next year, Division wants to purchase 1,/UU circuit doaras 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. 02:37:25 Required 1 Required 2 Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. BOOK Hint Division A Division B Total Company Print eferences Sales Expenses Added by the division Transfer price paid Total expenses Not operating income Required 2 >

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