The Dutton Company is decentralized, and divisions are considered investment centers. Dutton has one division that manufactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions.

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r The Dutton Company is decentralized, and divisions are considered investment centers Dutton has one division that manutactures oak dining room chairs with upholstered seat cushions The Chair Divsion cuts, assembles, and tinishes the oak chairs and then purchases and attaches the seat cushions (Click the icon to view additional information.) Read the requirements Requirement 1. Determine the total contribution margin for Dutton Company for the quarter Number of units x Contribution margin per uniTotal contribution margin Chair Division Cushion Division Requirement 2. Assume the Chair Division purchases the 1,200 cushions needed trom tne Cushion Divis on at its current sales price Wnat is the total contnbution margin tor each division and the company Number of units xContribution margin per urnitTotal contribution margin Chair Division Cushion Division Requirement 3. Assume the Chair Division purchases the 1,200 cushions needed from the Cushion Division at its current variable cost What is the total contribution margin for each division and the company? (Enter " for any zero amounts Number of units Contrbution maigin per unni-Tola contribution margin Chair Division Cushion Division equirement 4. Review your answers for Requirements 1, 2, and 3 What is the best option for Dutton Company? he best opton Dullon is the current scenario (Requirement 1) y having the Chair Division purchase the cushions from an outside vandor, the company would generate more in total contribution margin than if the division purchases cushions intermally equirement 5. Assume the Cushion Division has capacity of 2,400 cushions per quarter and can continue to supply its outside customers with 1,200 cushions per quarter and also supply the Chair Division with 1,200 cushions per quarter. What transfer price hould Dutton Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter ullon Comipany should set Uhe trarisfer price al S he price for which it can purchase the cushions from an outside vendor sing the transfer price ycu dectermined, calculate the total contribution margin for the quarter because the Chair Division would nol be willing lo pay more than Requirements 1. Determine the total contnbution margin for Dutton Company tor the quarter 2. Assume the Chair Division purchases the 1,800 cushions nooded from the Number of units x Contribution margin per unit Total contribution margin hair Division Cushion Division at its current sales price. What is the total contribution margin for cach division and the company? Assurne the Chair Division purchases the 1,800 cushions needed from the Cushion Division al its current variable cost What is the tolal contribution margin for each division and the company? 3. ushion Division-interrial 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? Assume the Cushion Division hs capacity of 3,600 cushions per quarter and can continue to supply its outside customers with 1,800 cushions per quarter and also supply the Chair Division with 1,800 cushions per quarter. What ransfer price should Dutton Company set? Explain your reasoning. Using the 5, price you determined, calculate the total contribution margin for the The Chair Division currently purchases the cushions for $26 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company The Chair Division currently sells 1,800 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 Sales Price per Chair Variable Cost (other than cushion) Variable Cost (cushion) Contribution Margin per Chair Cushion Division $ 95 Sales Price per Cushion $ 32 35 26 $ 34 Variable Cost per Cushion $ 24 Contribution Margin per Cushion Requirements 1. 2. Determine the total contribution margin for Dutton Company for the quarter Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Assume the Chair Division purchases the 1,800 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? Review your answers for Requirements 1, 2, and 3. What is the best option for Dutton Company? Assume the Cushion Division has capacity of 3,600 cushions per quarter and can continue to supply its outside customers with 1,800 cushions per quarter and also supply the Chair Division with 1,800 cushions per quarter. What transfer price should Dutton Company set? Explain your reasoning. Using thee transfer price you determined, calculate the total contribution margin for the quarter 3. 4. 5