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I would like assistance with requirement 4.

- and divisions are considered investment centers. Click the icon to view additional information.) L : em More Info nti The Chair Division currently purchases the cushions for $20 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,400 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,400 cushions per quarter. The two divisions report the following information: Chair Division Cushion Division $ $ 30 Sales Price per Chair Variable Cost (other than cushion) 80 42 Sales Price per Cushion Variable Cost per Cushion bntribut Variable Cost (cushion) 20 its $ Contribution Margin per Chair 18 Contribution Margin per Cushion Print Print Done Done no IT ITU TIPU TUUU unu MITUNTUNUTTUU Novo. %) P24-23A (similar to) Question Help X - lon.) The Chacon Company is decentralized, and divisid Chacon has one division that manufactures oak dir cushions. The Chair Division cuts, assembles, and and attaches the seat cushions. Requirements Requirement 1. Determine the total contribution m Number of units x Chair Division 1,400 x Cushion Division 1,400 x Total 1. Determine the total contribution margin for Chacon Company for the quarter. 2. Assume the Chair Division purchases the 1,400 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 1,400 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Chacon Company? 5. Assume the Cushion Division has capacity of 2,800 cushions per quarter and an continue to supply its outside customers with 1,400 cushions per quarter and also supply the Chair Division with 1,400 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. he total contribution margin for each division and Requirement 2. Assume the Chair Division purcha the company? Number of units x Chair Division 1,400 x Cushion Division 1,400 x Choose from any list or enter any number in the Print Done (Click the icon to view additional information.) The Chacon Company is decentralized, and divisions are considered investment centers. Chacon has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. Read the requirements Requirement 1. Determine the total contribution margin for Chacon Company for the quarter. Chair Division Number of units 1,400 1,400 X x x Contribution margin per unit $ 18 $ 20 = Total contribution margin = $ 25,200 - $ 28,000 53,200 Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1,400 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? = Number of units 1,400 X x Contribution margin per unit $ Total contribution margin 11,200 Chair Division 1,400 Cushion Division 28,000 20 nonn Choose from any list or enter any number in the input fields and then click Check Answer. A (Click the icon to view additional information.) The Chacon Company is decentralized, and divisions are considered investment centers. Chacon has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. Read the requirements. 39,200 Total Requirement 3. Assume the Chair Division purchases the 1,400 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? (Enter "O" for any zero amounts.) Number of units 1,400 Contribution margin per unit 28 Chair Division xx x $ $ = Total contribution margin = $ 39,200 39,200 = $ 0 $ 39,200 Cushion Division 1,400 O | Total | Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Chacon Company? The best option for Chacon is the current scenario (Requirement 1). By having the Chair Division purchase the cushions from an outside vendor, the company would generate more in total contribution margin than if the division purchases cushions internally. Choose from any list or enter any number in the input fields and then click Check Answer. (Click the icon to view additional information.) The Chacon Company is decentralized, and divisions are considered investment centers. Chacon has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. Read the requirements. Cushion Division 1,400 x $ 0 = $ $ 39.200 Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Chacon Company? The best option for Chacon is the current scenario (Requirement 1). By having the Chair Division purchase the cushions from an outside vendor, the company would generate more in total contribution margin than if the division purchases cushions internally. Requirement 5. Assume the Cushion Division has capacity of 2,800 cushions per quarter and can continue to supply its outside customers with 1,400 cushions per quarter and also supply the Chair Division with 1,400 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. Chacon Company should set the transfer price at $ because the Chair Division would not be willing to pay more than the price for which it can purchase the cushions from an outside vendor. the price for which the Cushion Division can sell the cushions to outside customers. part Clear All Check Answer remaining