The Rolling Parts Division of Thornton Company plans to set up a facility with the capacity to make 10,000 units annually of a webcam for laptop computers. The avoidable cost of making the webcam is as follows. Costs Variable cost Fixed cost Total $290, eee 150,000 Cost per Unit $29.00 15.00(at capacity) Required a-1. Assume that Thornton's Langford Division is currently purchasing 5,400 of the same type of webcam each year from an outside supplier at a market price of $51.78. What would be the financial consequence to Thornton if the Rolling Parts Division makes the webcam and sells it to the Langford Division? a-2. Does a reasonable range of transfer price exist? b. Suppose that the Langford Division increases production so that it could use 10.000 webcams made by the Rolling Parts Division. How would the change in volume affect the range of transfer prices that would financially benefit both divisions? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg A2 Reg B Assume that Thornton's Langford Division is currently purchasing 5,400 of the same type of webcam each year from an outside supplier at a market price of $51.78. What would be the financial consequence to Thornton if the Rolling Parts Division makes the webcam and sells it to the Langford Division? Thornton would spend additional 42,012 ( ReqA Req A2 > The Rolling Parts Division of Thornton Company plans to set up a facility with the capacity to make 10,000 units annually of a webcam for laptop computers. The avoidable cost of making the webcam is as follows. Costs Total Cost perunat Variable cost $290, eee $29.00 Fixed cost 150,000 15.00(at capacity) Required 2-1. Assume that Thornton's Langford Division is currently purchasing 5.400 of the same type of webcam each year from an outside supplier at a market price of $51.78. What would be the financial consequence to Thornton if the Rolling Parts Division makes the webcam and sells it to the Langford Division? 0-2. Does a reasonable range of transfer price exist? b. Suppose that the Langford Division increases production so that it could use 10,000 webcams made by the Rolling Parts Division How would the change in volume affect the range of transfer prices that would financially benefit both divisions? Answer is not complete. Complete this question by entering your answers in the tabs below. Req A1 Reg A2 ReqB Does a reasonable range of transfer price exist? Does aronsonante range of transfer price oxist? The Rolling Parts Division of Thornton Company plans to set up a facility with the capacity to make 10,000 units annually of a webcam for laptop computers. The avoidable cost of making the webcam is as follows. Costs Total Cost per unit Variable cast $290,000 $29.00 Fixed cost 150,000 15.00(at capacity) Required 8-1. Assume that Thornton's Langford Division is currently purchasing 5,400 of the same type of webcam each year from an outside supplier at a market price of $51.78. What would be the financial consequence to Thornton if the Rolling Parts Division makes the webcam and sells it to the Langford Division? a-2. Does a reasonable range of transfer price exist? b. Suppose that the Langford Division increases production so that it could use 10,000 webcams made by the Rolling Parts Division. How would the change in volume affect the range of transfer prices that would financially benefit both divisions? Answer is not complete. Complete this question by entering your answers in the tabs below. Reg A1 Reg AZ Reg B Suppose that the Langford Division increases production so that it could use 10,000 webcams made by the Rolling Parts Division How would the change in volume offect the range of transfer prices that would financially benent both divisions? (Round your answers to 2 decimal places.) Transfer price range which financially benefit divisions from minimum to maximum and
