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S.T.A company has two divisions: The Sender division and the Receiver division The Sender division manufactures product A 333 that the Receiver division is currently
S.T.A company has two divisions: The Sender division and the Receiver division The Sender division manufactures product A 333 that the Receiver division is currently purchasing from an external supplier. Information provided by the Receiver division is as follows: Number of units of A333 needed 30000 units per year Price currently paid to external supplier for A333 $42.00 per unit Information provided by the Sender division is as follows: Required 1) Calculate the minimum and maximum transfer price. 2) Assume the managers of the two divisions agree on a transfer price of: $40.00 per unit Calculate the incremental income of each division if a transfer of 30000 units is made
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