the chacon company is decentralized, and the divisions are considered investment centers. Chacon has one divison that manufactures oak dining room chairs with upholdstered seat cushions. The chair divisions cut, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions

Requirement 5: assume the cushion division has capacity of 3,200 cushions per quarter and can continue ti supply its outside customers with 1600 cushions per quarter and also supply the chair division with 1600 cushions per quarter. what transfer price should chacon company set?

Requirement 1. Determine the total contribution margin for Chacon Company for the quarter. Number of units Contribution margin per unit Total contribution margin Chair Division Cushion Division Total Requirement 2. Assume the Chair Division purchases the 1.000 oushicns needed from the Cushion Division at its ourrent sales price. What is the total contribution margin for each division and the company? Number of units Contribution margin per unt Total oontribution in Chair Division Cushion Division Total Requirement 3 Assume the Chair Division purchases the 1,000 eushions needed fom the Cushion Division at its cument variable cost What is the tolal contibuton margin for each divison and the company? Number of unts Contribution margin per unt Total contrbution margin Chair Diviaion Cushion Divinion Total Requis Total Requirement 4. Review your answers for Requirements 1, 2 and 3. What is the best opion for Chacon Company? The best option for Chacon is Yin total contribution margin than if the division purchases cushions internally By having the Chair Division purchese the oushions from an outside vendor, the company would penerater Requirement 5. Assume the Cushion Division has capacity of 3,200 cushions per quarter and can continue to supply its outside custo reasoning. Using the transfer price you deternmined, calculate the total contribution margin for the quarter Chacon Company should set the transfer prioe at S because the Chair Division would not be willing to pay more than Using the transfer price you determined, calculate the total contribution margin for the quarter Number of units Contribution margin per unit Total contribution margin Chair Division Cushion Division-extemal X Cushion Division-intemal Total Choose from any list or enter any number in the input fields and then continue to the next question X iMore Info The Chair Division currently purchases the cushions for $20 from an outside vendor. The Cushion Division manufsactures upholstered seat cushions that are sold to customers outside the company The Chair Division currently sells 1,600 chairs per quarter, and the Cushion Division is operating at capacity, which is 1.800 cushions per quarter. The two divisions report the following information: Chair Division Cushion Division Sales Price per Chair 75 Sales Price per Cushion 34 Variable Cost (other than cushion) Variable Cost per Cushion 35 10 20 Variable Cost (oushion) $ 20 Contribution Margin per Cushion 24 Contribution Margin per Chair Print Done