* Question 1 Blossom's Division A produces a product that can be sold for $202 or transferred to Division B as a component for its product. Division B can buy the part from another suppler at $180. In the current period, Division B purchased 600 units from Division A. Data on a per-unit basis follows: Selling price Variable cost Allocated fixed cost Division A $202 96 95 Division B $589 190 173 The variable cost in Division B does not include the cost of the component provided by Division A or the outside supplier. Calculate the minimum transfer price if Division A is operating at capacity. Minimum transfer price Calculate the minimum transfer price if Division A is operating below capacity. Minimum transfer price Calculate the effect on the company's contribution margin if Division A has excess capacity and Division B buys 600 units from the outside supplier. (Show a negative amount preceded by a minus sign, e.g. -500 or (500).) Effect on contribution margin Calculate the contribution margin for the company for 600 units if Division A is required to sell to Division B when there is no excess capacity. Contribution margin Calculate the contribution margin for the company if Division A is at capacity and sells 600 units to the external market and Division B purchases 600 units from an outside supplier. Contribution margin Question Attempts: 0 of 3 used Copyright 2000-2020 by John Wiley & Sons, Inc. or related companies. All rights reserved