The Non$-$dairy Division of Swifty Corporation produces and sells almond milk to outside customers. The operationSwifty Company makes various electronic products. The company is divided into a number of autonomous

divisions that can either sell to internal units or sell externally. All divisions are located in buildings on the same

piece of property. The Board Division has offered the Chip Division $$22$ per unit to supply it with chips for $45,000$

boards. It has been purchasing these chips for $$23$ per unit from outside suppliers. The Chip Division receives

$$25\mathrm{.}40$ per unit for sales made to outside customers on this type of chip. The variable cost of chips sold externally

internally to the Board Division. The Chip Division has no excess capacity.

$($a$)$

Calculate the minimum transfer price that the Chip Division should accept. $($Round answers to $0$ decimal

places. e$.$g$.10.)$

Minimum transfer price $

Should Chip Division accept the offer?

$($b$)$

Suppose that the Chip Division decides to reject the offer. What are the financial implications for each division,

and for the company as a whole, of this decision?

Total

contribution margin by Board Division

$

Total

contribution margin by Chip Division

$

Overall

contribution margin for the company

$

has the capacity to produce $200000$ gallons of milk a year. Last year's operating results were as follows:

Assume the Non$-$dairy Division is operating at capacity. If the Dessert Division wants to purchase $30000$ gallons

of milk from the Non$-$dairy Division, what is the minimum price that will allow the Non$-$dairy Division to maintain

its current net income?

$$2\mathrm{.}09$ per gallon

$$0\mathrm{.}77$ per gallon

$$1\mathrm{.}44$ per gallon

$$3\mathrm{.}53$ per gallon