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The Wildhorse Company is a multidivisional company. Its managers have full responsibility for profits and complete autonomy to accept or reject transfers from other divisions.
The Wildhorse 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 \$1.464. Division A charges Division B the market price of $854 per unit of the part. Unit variable costs are $634 and $732 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 eg. (45). Division B's contribution margin 5 Company's total contribution margin Attempts: 0 of 1 used (b) The parts of this question must be completed in order. This part will be available when you complete the part above (c) The parts of this question must be completed in order. This part will be available when you complete the part above. Your answer has been saved. See score details after the due date. 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 es. -45 or parentheses es. (45).) Division B's contribution margin 5 Company's total contribution margin Attempts: 1 of 1 t (b) Assume that Division A can sell all its production in the open market. Should Division A transfer the goods to Division B? The transfer be made. If so, at what price? Attempts: 0 of 1 used (c) The parts of this question must be completed in order. This part will be available when you complete the part above
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