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PLEASE SHOW CORECT ANSWERS AND COMPLETE WORK IN SAME FORMAT. Crede Inc, has two divisions. Division A makes and sells student desks. Division B manufactures
PLEASE SHOW CORECT ANSWERS AND COMPLETE WORK IN SAME FORMAT.
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 $10.47 from an outside vendor. Division A needs 12,000 lamps for the coming year. Division B has the capacity to manufacture 50, 900 lamps annually. Sales to outside customers are estimated at 38, 900 lamps for the next year. Reading lamps are sold at $11.96 each. Variable costs are $6.78 per lamp and include $1.38 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, 700. Consider the following independent situations. What should be the minimum transfer price accepted by Division B for the 12,000 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division B Maximum transfer price paid by Division AStep by Step Solution
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