QUESTION ABOUT TRANSFER PRICING.

Can I just have the calculations please.

QUESTION ABOUT TRANSFER PRICING. PLEASE HELP! Parkside Inc. has three divisions (Entertainment, Plastics, and Video Card), each of which is considered an investment center for performance-evaluation purposes. The Entertainment Division manufactures video arcade equipment using products produced by the other two divisions, as follows: The Entertainment Division purchases plastic components from the Plastics Division that are considered unique (.e., they are made exclusively for the Entertainment Division). In addition, the Plastics Division makes less-complex plastic components that it sells externally and earns $3 contribution margin per unit. The Entertainment Division purchases, for each unit it produces, a video card from Parkside's Video Card Division, which also sells this video card externally (to other producers) for $20 per unit. This video card is also available from external suppliers for $20 per unit. The per-unit manufacturing costs associated with each of the above two items, as incurred by the Plastic Components Division and the Video Card Division, respectively, are: Plastic Components $1.25 Video Cards Direct material $2.40 Direct labour 2.35 3.00 1.00 1.50 Variable overhead Fixed overhead Total cost per unit 0.40 2.25 $9.15 $5.00 The Entertainment Division incurs a variable cost of $100 per video arcade equipment to further process one unit of plastic component and a video card purchased from the other two divisions. The Entertainment Division sells video arcade equipment for $200 per unit. (A) Determine whether the internal transfer of both plastic components and a video cards are profitable for Parkside Inc. Show your calculations. (B) Calculate the minimum transfer price per unit for both plastic component and video card, if both Plastic Components Division and Video Card Division have excess capacity. Show your calculations. (C) Describe the likely reaction of the managers of Entertainment Division and Video Card Division towards the transfer price, if the Video Card Division sells all video cards (total production capacity) to outside customers. Show the computation of both maximum and minimum transfer prices. (D) Describe the likely reaction of the managers of Entertainment Division and Plastics Division towards the transfer price, if Entertainment Division needs 200 units of plastic component which would require Plastics Division to cut back 100 units production of less-complex plastic component currently selling externally. Assume that the Video Card Division currently sells all its video cards externally. Show the computation of both maximum and minimum transfer prices