Part B: Armando Corporation consists of two manufacturing divisions: Crater Division and Dollar Division. The Crater Division manufactures and transfers partially processed components to the Dollar Division at a predetermined transfer price. It could also sell these components to outside buyers at $480 per unit in a perfectly competitive market. The standard cost per unit in each division is as follows: Crater Division Dollar Division Direct material $90 $160 Direct labour $120 $1 10 Manufacturing overhead $450* $360* * "Manufacturing overhead is 50% variable and 50% fixed. **Manufacturing overhead is 40% variable and 60% fixed. The Dollar Division can sell the finished product to outsiders at $1,140 per unit. Required: 1. What the transfer price would you recommend if there was no outside market for the partially processed component and Crater Division had spare capacity? Does it matter if Crater Division is identified as a cost centre or a profit centre? Explain your answer. 2. Assume that the head office has intervened to dictate the transfer price at standard absorption cost plus a 10% mark up. The Dollar Division has been approached with a special order for 300 components at $940 each. From the perspective of Armando Corporation as a whole, should the special order be accepted or rejected? Explain and show the supporting calculations. 3. Advise whether is desirable for the head office to dictate the transfer price? Explain your