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Little Goose Products, Inc., has a Parts Division that manufactures and sells a number of products, including a beak that could be used by another
Little Goose Products, Inc., has a Parts Division that manufactures and sells a number of products, including a beak that could be used by another division in the company, the Stuffed Animal Division, in one of its products. Data concerning that beak appear below: Parts Division 50,000 $50 Capacity in Units Selling Price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) $34 $5 The Stuffed Animal Division is currently purchasing 12,000 of these beaks per year from an overseas supplier at a cost of $48 per beak. Assume that the Parts Division is currently only able to sell 35,000 beaks a year. There is no savings in selling within the company. The minimum acceptable transfer price (per unit) from the standpoint of the Parts Division is Select) . The maximum acceptable transfer price (per unit) for the beaks from the standpoint of the Stuffed Animal Division is [Select) If a transfer price is set at $45, the Parts Division's net income will [Select] by Select and the Stuffed Animal Division's net income will increase by [ Select
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