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Transfer Pncing: Vanous Computations Corning Company has a decentralued organzation with a divisional structive. Two of these divisions are the Appliance Division and the Manufactured Housing Divisian. Each divisinal manager is evaluated on the basis of Rol. The Applance Drvision produces a small automatic dituwasher that the Manufactured Housing Divesion-can use in one of its models: Applance can produce up to 26,000 af these dishwashers per year. The varable costs of manufactunng the dishwashers are $92. The Manulactured Housing Dwision inserts the dishwasher into the model house and then sells the manufactured house to outside customers for $75,000 each, The division's capacity is 4,940 units. The variabie costs of the manulactured house (in addition to the cost of the dishwasher itseil) are $41,500. Required: Assume each part is independent, unless otherwive indicoted. 1. Assume that all of the dishwashers produced can be sold to external customeis for $312 each. The Manufactured thousing Division wants to buy 4,940 dishwashers per vear. What should the transfer price be? s. per unit \begin{tabular}{ll} Mnximum s & per unit \\ Minamum s & per unit \end{tabular} Identify the actuai transfer price, assuming that negotation splits the diflerence. s per unit Assume each part is independent, unless otherwise indicated. 1. Assume that all af the dishwashers produked can be sold to external customers for $312 each. The Manufactured Housung Diwsion wants to bury 4,940 dishwashers per vear What should the transfer price be? $ per unit 2. Refer to Plequirement 1: Assume $26 of avoidable distnbution costs. Identify the maximum and minimum transfer prices. Maxomum s per unit Minimum s per unit Identify the actuat transfer pnce, assuming that negotiation splits the difference. 5 per unit 3. Assume that the Appliance Divsion is operating at 75 percent capsoty. The Manufactured Housing Division is currently buying 4,940 dishwashers from an outside supplier for $276 each. Assume that any joint benefit will be split evenly between the two divisons. What is the expected transfer price? 5 ner unit How much will the profits of the Appliance Division increase, assuming that it sells the extra 4,940 dishwashers internally? s How much will the profts of the firm increase under this arrongement? 5