TK Electronics is a manufacturer with twodepartments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at$5.00 per chip. The costs associated with the computer chips are asfollows:

Computer chip costs Variable manufacturing costs . . .. 2.40 Variable selling and administrative costs . $ 0.80 Capacity . . . . . 500,000 units Current production . . . . 500,000 unitsRequirement 1. Should the Chips Department supply the chips to the Cell Phone Department under these circumstances? Before answering this question, first determine the minimum transfer price. (Round your answer to the nearest cent.) The minimum transfer price is $ The internal transfer take place. Requirement 2. If the Chips Department had sufficient capacity, would this make a difference? (Round your answer to the nearest cent.) The minimum transfer price, if the Chips Department had capacity, is $ ]. This is than the maximum transfer price of $2.75 per unit. Therefore, the internal transfer take place