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Larkspur Electronics operates as a decentralized company. Larkspur's Battery division manufactures batter chargers that are sold both externally to outside customers and internally to the
Larkspur Electronics operates as a decentralized company. Larkspur's Battery division manufactures batter chargers that are sold both externally to outside customers and internally to the Camera division. Battery division's annual capacity is 88,000 units. The revenue and costs associated with one battery charger are as follows: Selling Price to external customers $20 Variable Cost 13 Fixed Cost (based on capacity) 4 The Camera division would like to purchase 26,400 units of battery chargers; however, Cameron, the manager of the Camera division, is able to purchase the battery charger from an overseas supplier at $20. (a) Assuming the Battery division operates at 60% capacity, what is the range of the transfer price, if any, for the battery charger? Cameron has learned that the Battery division operates below its capacity. He is willing to pay up to $19.50 for a battery charger. Should the Battery division accept the offer at $19.50? (Round answers to 2 decimal places, e.g. 125.64. Enter 0 if there is no transfer price.) Minimum S TPS Maximum The range - TP : The Battery division should accept the offer to transfer the battery chargers at $19.50
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