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Exercise 21-16 (Part Level Submission) Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each
Exercise 21-16 (Part Level Submission) Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 10,400 lamps for the coming year. Division B has the capacity to manufacture 46,400 lamps annually. Sales to outside customers are estimated at 36,000 lamps for the next year. Reading lamps are sold at $11 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $87,100 Consider the following independent situations. (a) (b) (c) IF Division A needs 16,640 lamps instead of 10,400 during the next year, what should be the minimum transfer price accepted by Division B and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division B $ per unit Maximum transfer price paid by Division A per unit Click if you would like to Show Work for this question: Open Show Work LINK TO TEXT LINK TO VIDEO Attempts: 0 of 3 used
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