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Indigo Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Indigo sells car stereos to Berna, as well as to

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Indigo Corporation manufactures car stereos. It is a division of Berna Motors, which manufactures vehicles. Indigo sells car stereos to Berna, as well as to other vehicle manufacturers and retail stores. The following information is available for Indigo's standard unit: unit variable cost $35, unit fixed cost $21, and unit selling price to outside customer $84. Berna currently purchases a standard unit from an outside supplier for $78. Because of quality concerns and to ensure a reliable supply, the top management of Berna has ordered Indigo to provide 240,000 units per year at a transfer price of $33 per unit. Indigo is already operating at full capacity. Indigo can avoid $3 per unit of variable selling costs by selling the unit internally. Answer each of the following questions. The minimum transfer price that Indigo should accept is: Minimum transfer price =($35$3)+($84$35)=$81 [($35$3)+($84$35)=$81] [(Tot. UVC - Var. ship. cost saved) + (Outside USP - Outside UVC) = Min. transfer price] (b) What is the potential loss to the corporation as a whole resulting from this forced transfer

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