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Going Places, Inc., manufactures a variety of luggage for airline passengers. The company has several luggage production divisions, including the Suitable Cases Division, as well
Going Places, Inc., manufactures a variety of luggage for airline passengers. The company has several luggage production divisions, including the Suitable Cases Division, as well as a wholly owned subsidiary, It's Mine, that manufactures small identification tags used on luggage. Each piece of luggage that Suitable Cases produces has two identification tags for which it previously paid the going market price of $2 each. Financial information for Suitable Cases and It's Mine follows: Suitable Cases Division It's Mine Sales $ 675,000 4,500 bags $150.00 each 200,000 tags $2.00 each 400,000 Variable expenses 382,500 4,500 bags #585.00 each 200,000 tags $0.50 each 100,000 It's Mine has a production capacity of 250,000 tags. Required 1. Determine how much Going Places will save on each tag if the Suitable Cases Division obtains them from It's Mine instead of an external supplier. (Round your answer to 2 decimal places.) Savings per Tag 2. Determine the maximum and minimum transfer prices for the tags. (Round your answers to 2 decimal places.) Maximum Transfer Price Minimum Transfer Price
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