Swift Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading

lamps.

Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10 from an

outside vendor. Division A needs 12,200 lamps for the coming year.

Division B has the capacity to manufacture 61,000 lamps annually. Sales to outside customers are estimated at 48,800

lamps for the next year. Reading lamps are sold at $12 each. Variable costs are $7 per lamp and include $1 of variable

sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B

is $97.600.

Consider the following independent situations.

(a)

What should be the minimum transfer price accepted by Division B for the 12,200 lamps and the maximum transfer

price paid by Division A?

Minimum transfer price accepted by Division B

Maximum transfer price paid by Division A

$

$

per unit

per unit

Suppose Division B could use the excess capacity to produce and sell externally 18,300 units of a new product at a

unit selling price of $7. The unit variable cost for this new product is $5. What should be the minimum transfer

price accepted by Division B for the 12,200 lamps and the maximum transfer price paid by Division A?

Minimum transfer price accepted by Division B

Maximum transfer price paid by Division A

$

$

per unit

per unit

(c)

If Division A needs 15,250 lamps instead of 12,200 during the next year, what should be the minimum transfer

price accepted by Division B and the maximum transfer price paid by Division A? (Round answers to 2 decimal

places, e.g. 10.50.)

Minimum transter price accepted by Division e

pen unit

Maximum transfer price paid by Division A

per unit

Swifty inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of Its components. Division A can purchase reading lamps at a cost of $10 from an outside vendor. Division A needs 12,200 lamps for the coming year. Division B has the capacity to manufacture 61,000 lamps annually. Sales to outside customers are estimated at 48,800 lamps for the next year. Reading lamps are sold at $12 each. Variable costs are $7 per lamp and include $1 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $97,600. Consider the following independent situations. (a) What should be the minimum transfer price accepted by Division B for the 12,200 lamps and the maximum transfer price paid by Division A? eTextbook and Media Attempts: 0 of 3 used Using multiple attempts will impact your score. 10% score reduction after attempt 2 Suppose Division B could use the excess capacity to produce and sell externally 18,300 units of a new product at a unit selling price of $7. The unit variable cost for this new product is $5. What should be the minimum transfer price accepted by Division B for the 12,200 lamps and the maximum transfer price paid by Division A ? \begin{tabular}{|l|l|l} Minimum transfer price accepted by Division B & $ & per unit \\ Maximum transfer price paid by Division A & $ & per unit \end{tabular} eTextbook and Medla Attempts: 0 of 3 used Using multiple attempts will impact your score. 10% score reduction after attempt 2 (c) If Division A needs 15,250 lamps instead of 12,200 during the next year, what should be the minimum transfer price accepted by Division B and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted by Division B $ per unit Maximum transfer price pald by Division A per unit