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The Crane Company is a multidivisional company. Its managers have full responsibility for profits and complete autonomy to accept or reject transfers from other
The Crane Company is a multidivisional company. Its managers have full responsibility for profits and complete autonomy to accept or reject transfers from other divisions. Division A produces a sub-assembly part for which there is a competitive market. Division B currently uses this sub-assembly for a final product that is sold outside at $984. Division A charges Division B the market price of $574 per unit of the part. Unit variable costs are $434 and $492 for Divisions A and B, respectively. The manager of Division B feels that Division A should transfer the part at a lower price than market because at market, Division B is unable to make a profit. (a) Calculate Division B's contribution margin if transfers are made at the market price, and calculate the company's total contribution margin. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).) Division B's contribution margin $ Company's total contribution margin $
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