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Griffin Motors manufactures specialty tractors. It has two divisions:a Tractor Division and a Tire Division. The Tractor Division can use the tires produced by the
Griffin Motors manufactures specialty tractors. It has two divisions:a Tractor Division and a Tire Division. The Tractor Division can use the tires produced by the TirDiviion. The market price per tire is S85. The Tire Division has the following costs per tire: (Click the ioon to view the costs and additional infommation.) Read the requirements. Requiremen1.Asaume that the Tire Division has excess capacity, meaning that it can produce tires for the Tractor Division without giving up any of its current tire sales to outsiders. If Griffin Motors has a negotiated transfer price policy, what is the lawest acceptable transfer price? What is the highest acoaptable transfer price? (Assume the S1 inclucles only the variable portion of conversion costs.) The lowest acceptable transfer priceissthe Tire Division's XRequirements More Info 1. Assume that the Tire Divisioi has excuss capacity, meaning that it can produce tires for Direct material cost per tire $17 Conversion costs per tire S1 (Assume the S1 includes only the variable portion of conversion costs.) the Tractor Divisi without giving up any of its current tire sales to oulsiders. If Griflirn Motors has a nogolialed transfer price policy, what is the lowest acceplable transler price? What is the highest accoplable transler price? If Griffin Motors has a cost-plus transfer price policy of full absorption cost plus 10%, what would the transfer price be If the Tire Division is curently producing at capacity (meaning that it is selling every single tire it has the capacity to produce), what would likely be the fairest transfer prica strategy to use? What would be the transfer price in this case? 2. Fixed manufacturing overhead cost for the year is expected to total S90,000. The Tire Division expects to manufacture 45,000 tires this year. The fixed manufacturing overhead per tire is S2 (S90,000 divided by 45,000 tires). 3. Print Done Print Done
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