Requirement 5. Assume the Cushion Division has capacity of 3,600 cushions per quarter and can continue to supply its outside customers with 1,800 cushions per quarter and also supply the Chair Division with 1,800 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. because the Chair Division would not be willing to pay Chacon Company should set the transfer price at more than the price for which it can purchase the cushions from an outside vendor. The Chacon Company is decontraizzed, and divisions are considered investment centers. Chacon has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles. and finishes the oak chairs and then purchases 1. (Click the icon to view additional information.) and attaches the seat cushions: Cushion Division Read the requirements. Total Requirement 2. Assume the Chair Division purchases the 1,B00 cushions needed from the Cushion Division at its current sales price. What is the total contribution mat the coempany? Requirement 3. Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current variable cost. What is the total contribution m the company? (Enter "0" for any zero amounts.) Requirement 1. Determine the total contribution margin for Chacon Company for the quarter. Requirement 2. Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current sales price. Whatrs the th the company? Requirement 3. Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current variable cost. What is th the company? (Enter "0" for any zero amounts.) Requirements 1. Determine the total contribution margin for Chacon Company for the quarter. 2. Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1,2 , and 3 . What is the best option for Chacon Company? 5. Assume the Cushion Division has capacity of 3,600 cushions per quarter and can continue to supply its outside customers with 1,800 cushions per quarter and also supply the Chair Division with 1,800 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. More info The Chair Division currently purchases the cushions for $26 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,800 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,800 cushions per quarter. The two divisions report the following information
