Question
Exercise 22-16 (Part Level Submission) Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each
Exercise 22-16 (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 $ 10.00 from an outside vendor. Division A needs 10,100 lamps for the coming year. Division B has the capacity to manufacture 49,400 lamps annually. Sales to outside customers are estimated at 39,300 lamps for the next year. Reading lamps are sold at $ 11.65 each. Variable costs are $ 6.63 per lamp and include $ 1.37 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 $ 78,100 . Consider the following independent situations. Collapse question part (a) Correct answer. Your answer is correct. What should be the minimum transfer price accepted by Division B for the 10,100 lamps 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 $ Entry field with correct answer 5.26 per unit Maximum transfer price paid by Division A $ Entry field with correct answer 10 per unit SHOW SOLUTION LINK TO TEXT Attempts: 1 of 5 used Collapse question part (b) Suppose Division B could use the excess capacity to produce and sell externally 19,100 units of a new product at a price of $ 7.35 per unit. The variable cost for this new product is $ 5.69 per unit. What should be the minimum transfer price accepted by Division B for the 10,100 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.)
The question:::: Minimum transfer price accepted by Division B $ per unit Maximum transfer price paid by Division A $ per unit ???
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