The division's manufacturing costs and variable selling expenses related to the video card are as follows: Cost per unit Direct matelials $ 0.00 Direct labor :5 4.00 Variable manufacturing overhead :5 10.00 Fixed manufacturing overhead (at current production level] :5 11.00 Variable selling expenses $ 2.00 The Computer Division of Martin Manufacturing can use the video card produced by the Small Components Division and is interested in purchasing the video card inhouse rattler than buying it from an outside supplier. The Small Components Division has sufcient excess capacity.r with which to make the extra video cards. Because of competition, the market price for this video card is $35 regardless of whether the video card is produced by Martin Manufacturing or another company. Assume the Small Components Division of Martin Manufacturing produces a video card used in the assembly of a variety of electronic products. 'crlolr the icon to view additional infom'lation.) Read the guirements. Requirement 1. What is the highest acceptable transfer price for the divisions? The highest acceptable transfer price forthe divisions is the Small Components Division's .$|_|. Requirement 2. Assuming the transfer price is negotiated between the divisions of the com pany, what would be the lowest acceptable transfer price? Assume variable selling expenses pertain to outside sales only. The lowest acceptable transfer price for the divisions is the Small Components Division's .s | l. Requirement 3. Which transfer price would the manager of the Small Components Division prefer? Which transfer price would the manager of the Computer Division prefer? The manager ofthe Small Components Division would prefer a transfer price of $ |:| . The manager ofthe Computer Division would prefer a transfer price of s |:| . Requirement 4. If the company's policyr requires that all in-house transfers must be priced at full absorption cost plus 14%, what transfer price would be used? Assume that the increased production level needed to ll the transfer would result in xed manufacturing overhead decreasing by $3.00 per unit. (Roundyour answerto the nearest cent.) Begin by selecting the formula to compute the transfer price under this strategy. [Abbreviation used: MOH = Manufacturing overhead.) 2 Costplus transfer price The transfer price that would be used is 5 . Requirement 5. If the company's policy.r requires that all inhouse transfers must be priced at total manufacturing variable cost plus 26%, what transfer price would be used? Assume that the company does not consider fixed manufacturing overhead 'n setting its internal transfer price in this scenario. {Round youranswer to the nearest cent.) Begin by selecting the formula to compute the transfer price under this strategy. (Abbreviation used: MOH : Manufacturing overhead.) = Transfer price The transfer price that would be used is as |:| . Requirement 6. Assume now that the company does incur the variable selling expenses on internal transfers. If the company policy is to set transfer prices at 104% of the sum ofthe full absorption cost and the variable seling expenses, what transfer price would be set? Assume that the xed manufacturing overhead would drop by Choose from ant,r list or enter any number in the input elds and then continue to the next question. Requirement 6. Assume now that the company.r does incur the variable selling expenses on internal transfers. If the companylr policy is to set transfer prices at 104% of the sum ofthe full absorption cost and the reliable seling expenses, what transfer price would be set? Assume that the xed manufacturing overhead would drop by $3.00 per unit as a result of the increased production resulting from the internal transfers. (Round your answer to the nearest cent.) Begin by selecting the form ula to compute the transfer price under this strategy. [Abbreviation used: MOH = Manufacturing overhead.) = Tran sfer p rice The transfer price that would be used is S |:|