The assembling division uses component G $,$ along with externally supplied components, in the

assembly of product $F.$ The assembling division can sell product $F$ externally for $$45.$ The costs

incurred by the assembling division, excluding the cost of component $F,$ are as follows:

$1.$ Determine the maximum and the minimum transfer price that could be used for each unit of

component G$.$

$2.$ Explain whether the managers would be able to negotiate a transfer price.

$3.$ Indicate what the transfer price would be if it is set equal to full production costs.

$4.$ Indicate what the transfer price would be if it is set equal to variable production costs.

$5.$ Briefly explain why the manufacturing division would be reluctant to transfer component G

at a price equal to variable costs.

$6.$ ldentify what other factors may have an influence on the determination of the transfer price.