Kennedy Company makes bicycles. Various divisions make components and transfer them to the Bexley division for assembly into final products. The Bexley division can also buy components from external suppliers. The Cuyahoga division makes the wheels, and it also sells wheels to external customers. All divisions are profit centers, and managers are free to negotiate transfer prices. Prices and costs for the Cuyahoga and Bexley divisions are as follows: (Click the icon to view the prices and costs for each division.) Fixed costs in both divisions will be unaffected by the transfer of wheels from Cuyahoga to Bexley. Read the requirements. Requirement 1. Compute the maximum transfer price per wheel the Bexley division would be willing to pay to buy wheels from the Cuyahoga division. Begin by calculating the Bexley division's contribution margin per bicycle (excluding the cost of the wheels). Sales price Variable costs (except for wheels) Contribution margin per bicycle Data table Requirements Cuyahoga Division Sales price to external customers Internal transfer price $ 17 ? Costs Variable costs per wheel $ 10 Total fixed costs $ 270,000 66,000 wheels* 1. Compute the maximum transfer price per wheel the Bexley division would be willing to pay to buy wheels from the Cuyahoga division. 2. Compute the minimum transfer price per wheel at which the Cuyahoga division would be willing to produce and sell wheels to the Bexley division. Assume that Cuyahoga has excess capacity. Budgeted production *Includes production for transfer to Bexley Bexley Division es Get more help Print Done - X Sales price to external customers Costs $ 167 Wheels, per bicycle ? Other components, per bicycle $ 75 Other variable costs, per bicycle $ 50 Total fixed costs $ 580,000 Budgeted production 16,000 bicycles Check answer