Hill, Inc., has two divisions: Appliance Division and Parts Division. The Parts Division makes a component that can be used in a product assembled by Appliance Division. Currently, the market price of the component is $6. Data on the component and on the final product are as follows: Component Final Product (Parts Division) (Appliance Division) Price (set by outside market) $6.00 $32.00 $2.30 Unit variable cost of component Unit variable cost without component $20.00 Unit fixed overhead $1.20 $4.75 $0.60 $3.40 Unit selling cost Total fixed selling & admin exp $30,000 $96,000 Total capacity in units 70,000 50,000 Total units to produce & sell next year 70,000 50,000 Hill, Inc., requires that any transfers that occur take place at full manufacturing cost. However, division managers may agree to refuse to transfer at that price. 1. What is the full cost transfer price? (Round your answer to the nearest cent.) $ 2. Will Parts Division be willing to transfer at that price? Will Appliance Division be willing to transfer at that price? Use the Interactive Graph to answer the following questions: 3. Suppose that the Parts Division agrees to sell the component to the Appliance Division for full manufacturing cost. No other costs will change. What is the benefit to the Parts Division of that transfer price? Use the Interactive Graph to answer the following questions: 3. Suppose that the Parts Division agrees to sell the component to the Appliance Division for full manufacturing cost. No other costs will change. What is the benefit to the Parts Division of that transfer price? To the Appliance Division