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Sorman Motors manulactures specialty tractors. It has two divisions: a Tractor Divion and a Tre Dwision. The Tractor Ovision can use the tres produced by

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Sorman Motors manulactures specialty tractors. It has two divisions: a Tractor Divion and a Tre Dwision. The Tractor Ovision can use the tres produced by be fire Divion The madeet price per re is \$60. The Tire Division has the following costs per tre: 1. (Cick the lcon to view the costs and adaisonal informaton) Read the requirements. Requirement 1. Assume that the Tre Division has excess capocily, meaning that it can produce tres for the Trattor Divsion whout giving up any of ts current tre saies to cutsiders if Gorman Motors has a negotated transter price policy, what is the lowest acceptabie trantfer price? What is the bighest acceptable transter price? (Assume the S3 includes only the saratie porton of corversion costsi) The lowest acceptabie transfer price is ; the Tire Division's Requirements 1. Astume that the Tire Divition has excess capacty, meaning that ir can produce tres for the Tractor Division without giving up any of its curtent tre salos to cutilders. Ir Gorman Motors has a negotisted transler price policy, what is the lowest acceptable transter price? What is the highest acceptable transter price? 2. If Gorman Moters has a cost-plus transter price policy of tall abeorption cost plus 20% What would the tranter price be? 3. If the Tre Division is currenty producing at capecity (meaning eut it is seing every single the it has the capocily to produce). what would ikely be the tarest transter price ctrategy to use? What would be the tranater price in this case? More info Direct material cost per tire $21 Conversion costs per tire $3 (Assume the $3 includes only the variable portion of conversion costs.) Fixed manufacturing overhead cost for the year is expected to total $58,000. The Tire Division expects to manufacture 58,000 tires this year. The fixed manufacturing overhead per tire is $1 ( $58,000 divided by 58,000 tires)

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