PART B Computer Labs (M) Sdn. Bhd. has two divisions, the Component Division and the Product Division. The Component Division produces a video circuit board which is used in the manufacture and assembly of a variety of electronic devices. The Component Division's cost data related to the video circuit board are as follows: Cost Per Unit (RM) Direct materials 20.00 Direct labour 5.00 Variable manufacturing overhead cost 3.00 Fixed manufacturing overhead 8.00 Variable selling expenses (Incurred only for external sales) 2.00 Continued... The Component Division can sell the video circuit board to other manufacturers. The market price for the video circuit board is RM45.00. Currently the Component Division has sufficient capacity with which to make any extra video circuit boards. Currently all the video circuit boards produced by the Component Division is sold internally to the Product Division. The Product Division uses the video circuit board to manufacture a mini-camera. The Product Division sells this mini-camera for RM250.00 per unit. The Product Division's cost structure (excluding transfer-in cost) related to the manufacture of the min-camera is as follows: Direct materials Direct labour Variable manufacturing overhead cost Fixed manufacturing overhead Cost Per Unit (RM) 30.00 10.00 6.00 16.00 RM150 Required: i. What is the maximum acceptable transfer price for the Divisions? Based on this transfer price, compute the contribution-margin for the divisions and for the company as whole. i. What is the minimum transfer price? Is the minimum transfer price acceptable to the manager of the component division? To the manager of the product division? Show computations for contribution margins of both divisions and explain your answer. iii. If the company's policy requires that all in-house transfers must be priced at full absorption cost plus 20%, what is the transfer price? iv. Explain one (1) potential limitation of a full cost transfer price