Exercise 15-37 (Algo) Evaluate Transfer Pricing System: Negotiated Rates (LO 15-2, 3) Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is manufactured in Fabrication and then packaged and sold in Distribution. There is no intermediate market for the product. The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to 33,800 units. Fabrication (seee) $ 5,070 4,856 Contribution margin $ 1,014 800 $ 214 Distribution (seee) $ 8,450 6,253 $ 2,197 1,397 $800 Revenues Variable costs Fixed costs Divisional profit Assume there is no special order pending. Required: a. What transfer price would you recommend for Hamlet Industries? b. Using your recommended transfer price, what will be the Income of the two divisions, assuming monthly production and sales of 33,800 units? c. The manager of the Fabrication Division complains about the transfer price, saying that division profits are unfairly low. The two division managers meet and negotiate a transfer price of $148. What will be the income of the two divisions, assuming monthly production and sales of 33,800 units. Complete this question by entering your answers in the tabs below. Required A Required B Required C of 33,800 units? Using your recommended transfer price, what will be the income of the two divisions, assuming monthly production and sales Note: Enter your answers in whole dollars not in thousands of dollars. Complete this question by entering your answers in the tabs below. Required A Required B Required C What transfer price would you recommend for Hamlet Industries? Transfer price Required B Complete this question by entering your answers in the tabs below. Revenue Variable costs Contribution margin Fixed costs Fabrication Distribution Divisional profit < Required A Required C > Required A Required B Required C The manager of the Fabrication Division complains about the transfer price, saying that division profits are unfairly low. The two division managers meet and negotiate a transfer price of $148. What will be the income of the two divisions, assuming monthly production and sales of 33,800 units. Note: Enter your answers in whole dollars not in thousands of dollars. Revenue Variable costs Contribution margin Fixed costs Divisional profit Fabrication Distribution Show less