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that pump Germano Products, Inc.. has a Pump DiMision that manufactures and sells a number or products, including a standard pumpthat couldl be used by
that pump Germano Products, Inc.. has a Pump DiMision that manufactures and sells a number or products, including a standard pumpthat couldl be used by another dvsion in the company, the Pool Products Division, in one of its proclucts. Data conceming t aopear below Capacity in units Selling price ta outside cust.oners Variable cost per unit Fixed cost per unit (based on cepacity 62,500 5 73 5 26 $ 29 The Pool Products Division is currently purchasing 14,000 of these pumps per year from en oversees supplier at cost of S68 per pump. Assume that the Pump Divisipn is selling all af the pumps it can produce ta autslse austamers. Daos there exist a transfer price that wauld make both the Pump and Paal Products Diision financially batter aff than if the Paal Proaucts DvMsion ware ta cantinue huying its pumps trom the outside suppier? Multipk: Chaicc The answer cannat ba determined from the intormation that has been pravided O Yes. the minimum trensfer price thet the selling division shouls be willing to accept s less then the maximum transfer price that the buying division should be villing to accep. No. the minimum transter price that the seling dwsion should be willing to accept exceeds the maximum transter price that the buying diision shouid be willing to accept Ye bath dIVISIprls are a wys better af r regardless of whether the selling dinsori has enough ictie cenacity to handle zil of the buying division's needs
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