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Note: Wagons have FOUR wheels. (In contrast to one brownie per sundae.) Wagonco has two divisions: Wheels and Wagons. Each wagon needs four wheels. Fixed
Note: Wagons have FOUR wheels. (In contrast to one brownie per sundae.)
Wagonco has two divisions: Wheels and Wagons. Each wagon needs four wheels. Fixed costs = 0.
| Wheels | Wagons |
Sales/Market Price | $5 per wheel | $50 per wagon |
VC | $3 per wheel | $22.50 per wagon, not including the cost of wheels (four wheels per wagon) |
Items sold to outside market | 2,250 wheels per month | 800 per month |
Capacity | 5,000 wheels per month |
|
What range of transfer prices would instill goal congruence? Prove using CFISes.
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