Spirit Manufacturing is a division of Carla Vista Communications, Inc. Spirit produces cell phones and sells these phones to other

communication companies, as well as to Carla Vista. Recently, the vice president of marketing for Carla Vista approached Spirit with a

request to make $23,600$ units of a special cell phone that could be used anywhere in the world. The following information is available

regarding the Spirit division:

Selling price of regular cell phone

$$118$

Variable cost of regular cell phone

$59$

Additional variable cost of special cell phone

Indicate whether the internal transfer should occur for each of the following scenarios:

$($a$1)$

Your answer is correct.

The marketing vice president offers to pay Spirit $$126$ per phone. Spirit has available capacity. Calculate the minimum transfer

price.

Minimum transfer price $

Indicate whether the internal transfer should occur for the above situation.

The offer should be

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Attempts: $2$ of $2$ used

$($a$2)$

Your answer is incorrect.

The marketing vice president offers to pay Spirit $$126$ per phone. Spirit has no available capacity and would have to forgo sales of

$23,600$ phones to existing customers to meet this request. Calculate the minimum transfer price.

Minimum transfer price $

Indicate whether the internal transfer should occur for the above situation.

The offer should be

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