Mewah Corporation has two divisions. The fabrication division transfers partially completed components to the assembly division at a predetermined transfer price. The facbrication division, which has a standard variable production cost per unit of RM300, has no excess capacity and could sell all of its component to outside buyers at RM380 per unit in a perfectly competitive market. Required: i) Determine a transfer price using the general rule. (2 marks) ii) How would the transfer price change if the fabrication division had excess capacity? (1 mark) Let's say, the fabrication division's full (absorption) cost of a component is RM340, which includes RM40 of applied fixed overhead costs. The transfer price has been set at RM374, which is the fabrication division's full cost plus 10 percent mark-up. The assembly division has a special offer of RM465 for its product. The assembly division incurs variable costs of RM100 in addition to the transfer price for fabrication division's components. Both divisions currently have excess production capacity. Required: iii) Is the assembly division's manager likely to accept or reject the special offer? Why? iv) Is this decision in the best interests of Mewah Corporation as a whole? Why? (5 marks) (5 marks) v) Suppose that the assembly division manager decides to reject the special offer. Is the manager acting ethically? Explain