The coley company is decentralized and divisions are considered investment centers Cole he has a warrant division that manufactures oak dining room chairs with upholstered seat cushions to cheddars in cuts assembles and finishes the up chairs, and then produces in attaches the seat cushions

More info The Chair Division currently purchases the cushions for $22 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 1,000 chairs per quarter, and the Cushion Division is operating at capacity. which is 1,000 cushions per quarter. The two divisions report the following information: Division would not be willing to pay more than Requirements 1. Determine the total contribution margin for Coley Company for the quarter. 2. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1,2, and 3 . What is the best option for Coley Company? 5. Assume the Cushion Division has capacity of 2,000 cushions per quarter and can continue to supply its outside customers with 1,000 cushions per quarter and also supply the Chair Division with 1,000 cushions per quarter. What transfer price should Coley Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. Divistom woutionotve whing to pay morequid Ce Coley Company is decentralized, and divisions are considered investment centers. Coley has one division that m holstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and lequirement 1. Determine the total contribution margin for Coley Company for the quarter. Requirement 2. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its cur Requirement 3. Assume the Chair Division purchases the 1,000 cushions needed from the Cushion Division at its curr Requirement 4. Review your answers for Requirements 1,2, and 3 . What is the best option for Coley Company? The best option for Coley is By having the Chair Division purchase the cushions from an outside vendor, the company would generate Requirement 5. Assume the Cushion Division has capacity of 2,000 cushions per quarter and can continue to supply its transter price you determined, calculate the total contribution margin for the quarter. By having the Chair Division purchase the cushions from an outside vendor: the company would generate in total contrib Requirement 5. Assume the Cushion Division has capacity of 2,000 cushions per quarter and can conlinue to supply ifs outside transfer price you determined, calculate the total contribution margin for the quarter