Grouper Electronics manufactures wheelchairs. It has two divisionsthe Motors Division located in Canada and the Assembly Division located in Japan. The Motors Division was originally set up to supply its motors to Groupers Japanese plant to complete the wheelchairs. Over the years, the Motors Division experienced idle capacity and the senior management agreed that the Motors Division could sell its motors to external customers. As a result, each division operates as an independent profit centre. The Motors Divisions revenue and cost information is as follows:

The Assembly Division can purchase a similar quality of motors in Japan for $549 each. The Canadian tax rate is 40% and the Japanese tax rate is 30%.

The Motors Division currently sells 7,275 units to external customers and 2,425 units to the Assembly Division.The Motors Division uses the variable costing approach (i.e. variable cost + variable cost x 40% mark-up) as the transfer price. One of the Motors Divisions local customers would like to increase their annual order by 900 units. As a result, the Motors Division would like to charge the Assembly Division $636 per unit for 2,425 units to compensate for its loss of 900 units of sale from the local customer. The Assembly Division manager was not pleased about the increase in price, and argued that he is willing pay up to his local price of $549 per unit.

Capacity (in units) Selling price per unit Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Cost (based on capacity) 9,700 $636 92 185 47 156 Calculate the minimum transfer price, based on Grouper's transfer price policy. (Round answer to 2 decimal places, e.g. 125.64.) Minimum Transfer Price Establish the range for the transfer price, if any, between the two divisions. (Round answers to 2 decimal places, e.g. 125.64. Enter o if there is no transfer price.) Minimum SIPS Maximum The range S TPS $