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NEED HELP WITH B Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk
NEED HELP WITH B
Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 9,100 lamps for the coming year. Division B has the capacity to manufacture 51,900 lamps annually. Sales to outside customers are estimated at 42,800 lamps for the next year. Reading lamps are sold at $11 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $84.900. Consider the following independent situations. Your answer is correct. What should be the minimum transfer price accepted by Division B for the 9, 100 lamps and the maximum transfer price paid by Division 6 per unit Minimum transfer price accepted by Division B S Maximum transfer price paid by Division A $ 10 per unit Your answer is incorrect. Suppose Division B could use the excess capacity to produce and sell externally 13,650 units of a new product at a price of $7 per unit. The variable cost for this new product is $5 per unit. What should be the minimum transfer price accepted by Division B for the 9,100 lamps and the maximum transfer price paid by Division A? Minimum transfer price accepted by Division B $ per unit Maximum transfer price paid by Division A per unit eTextbook and Media Assistance Used Save for Later Last saved 42 minutes ago. Attempts: 1 of 3 used Submit Step by Step Solution
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