P24-23A (similar to) (Click the icon to view additional information.) The Dutton Company is decentralized, and divisions are considered investment centers. Dutton has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions. Read the requirements. Requirement 1. Determine the total contribution margin for Dutton Company for the quarter. i Requirements Number of units X Contribution margin per unit = Total contribution margin Chair Division Cushion Division Total i More Info 1. Determine the total contribution margin for Dutton Company for the quarter. 2. Assume the Chair Division purchases the 900 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 900 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? 5. Assume the Cushion Division has capacity of 1,800 cushions per quarter and can continue to supply its outside customers with 900 cushions per quarter and also supply the Chair Division with 900 cushions per quarter. What transfer price should Dutton Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. The Chair Division currently purchases the cushions for $32 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 900 chairs per quarter, and the Cushion Division is operating at capacity, which is 900 cushions per quarter. The two divisions report the following information: Chair Division Sales Price per Chair $ Cushion Division Sales Price per Cushion Variable Cost per Cushion $ 85 42 34 Variable Cost (other than cushion) Print Done Variable Cost (cushion) $ Contribution Margin per Chair Contribution Margin per Cushion