Exercise 15-40 (Algo) Segment Reporting (LO 15-5) Eastlawn Travel has two operating divisions, Tours and Resorts. The two divisions meet the requirements for segment disclosures. Before transactions between the two divisions are considered, revenues and costs are as follows: Revenues Costs Tours $35,360,000 19,880,000 Resorts $ 24,360,000 17,680,000 Help The two divisions have an arrangement by which Resorts gives coupons redeemable for tours and Tours gives discount coupons good for stays at a resort. The value of the coupons for the tours redeemed during the past year totaled $6.9 million. The discount coupons redeemed at the resorts totaled $3.8 million. As of the end of the year, all coupons for the current year expired. Required: What are the operating profits for each division considering the effects of the costs arising from the joint agreement? Note: Enter your answers in thousands. Tours Resorts Operating Profits Exercise 15-35 (Algo) International Transfer Prices (LO 15-4) Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Production sells many components to third parties in addition to Packaging. Selected data from the two operations follow: Capacity (units) Sales price Variable costsb Fixed costs Production 51,100 $ 262 $ 118 Packaging 25,550 $ 802 $ 310 $ 30,000,000 For Production, this is the price to third parties. $ 18,000,000 b For Packaging, this does not include the transfer price paid to Production. Suppose Production is located in Country A with a tax rate of 30 percent and Distribution in Country B with a tax rate of 10 percent. All other facts remain the same. Required: a. Current output in Production is 25,550 units. Packaging requests an additional 6,760 units to produce a special order. What transfer price would you recommend? b. Suppose Production is operating at full capacity. What transfer price would you recommend? c. Suppose Production is operating at 47,720 units. What transfer price would you recommend? a. Optimal transfer price b. Transfer price c. Transfer price per unit per unit per unit