Question
Trimble Crane, Inc. has a number of divisions, including the Palm Division, a producer of hydraulic pumps, and Acer Division, a manufacturer of motors. Palm
Trimble Crane, Inc. has a number of divisions, including the Palm Division, a producer of hydraulic pumps, and Acer Division, a manufacturer of motors.
Palm Division produces the h20-model pump that can be used by Acer Division in the production of motors that regulate the raising and lowering of the motor's crane derrick. The market price of the h20-model is $744, and the full cost of the h20-model is $540.
Now suppose that Trimble Crane allows negotiated transfer pricing and that Palm Division can avoid $120 of selling expense by selling to Acer Division.
What is the minimum transfer price?(already tried 420 and that's not correct)
What is the maximum transfer price?(already tried 624 and that's not correct)
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