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Instructions Garcon Inc Divisional Income Statements For the Year Ended December 31, 2012 Consumer Division 1 Commercial Division Total 1 Sales 14.400 units 5144 per unit $20.000.00 52.073.600.00 5.940.000.00 21.600 units $275 per unit 55.40.000.00 $5.940,000.00 52.073.000.00 58.013.600.00 1 Total Expenses 51.497.600.00 51.492.500.00 Variable 14400 units - 5104 per unit 21.600 units - 5193 per unit 54.168.800.00 4168.800.00 son anon Previous Instructions 14.400 units 5144 per unit 32.075.600.00 $2.073.600.00 4 21.600 units - $275 per unit $5,940,000.00 5.940.000,00 $ Total sales $2.073,600.00 55,940,000.00 $8.013.500.00 Expenses 1 Variable 51:497.600.00 $1.497.600.00 14,400 units - 5104 per unit 21.600 units - 5195 per unit 54.168.800.00 4.168.800.00 10 Fixed 200,000.00 520,000.00 720,000.00 Total expenses 54.688,800.00 56,386400.00 $1,692.600.00 $376.000.00 51.251.200.00 $1,627,200.00 Income from operations 5160 of the 5193 it represents mais costs and the remaining 143 perunt represents the variable convention expenses incurred within the Commis The Consumer Division is presently producing 14.400 units out of a total capacity of 17.280 unts Materials used in producing the Commercial Division's product are currently purchased from outside suppliers at a price of $150 per unit. The Consumer Division is able to produce the materials used by the Commercial Division Except for the possible transfer of materials between divisions, no chances are expected in sales and expenses +3580.0 5100 per unit orasents marais vous, and the remaining 343 per unit representa other table co eres WENN De Caminaria Divisen The Consumer Division is presently producing 14,400 units out of a total capacity of 17.280 unts. Materials used in producing the Commercial Division product are currently purchased from outside suppliers at a price of $150 per unt. The Consumer Division is able to produce the materials used by the Commercial Division. Except for the possible transfer of materials between division, no changes are expected in sales and expenses Required: 1. Would the market price of $450 per unt de an appropriate transfer price for Garcon Inc. ? Explain 2. the Commercial Division purchards 2880 unts from the consumer Division, rather than externally, at a negocuted transfer price of 15 per unut, how much would the income from operations of each division and the total company income from operations increase? 3. Prepare condensed divisional income statements for Garcon inc based on the dura in Requirement 2 4. Wa transfer price of 5126 per unit is negotiated, how much would the income from operations of each avision and the total company income from operations increase? 5. What is the range of possible negotiated transfer prices that would be acceptable for Garcon Inc.? 5b. Assuming that the managers of the Nvo divisions cannot agree on a transfer price what price would you suggest as the transfer price?