Tulip Company is made up of two divisions: A and B. Division A produces a widget that Division B uses in the production of its product. Variable cost per widget is $1.15; full cost is $1.80. Comparable widgets sell on the open market for $2.40 each. Division A can produce up to 2.20 million widgets per year but is currently operating at only 50 percent capacity. Division B expects to use 110,000 widgets in the current year. Required: 1. Determine the minimum and maximum transfer prices. (Enter your answers to 2 decimal places.) 2. Calculate Tulip Companys total benefit of having the widgets transferred between these divisions. 3. If the transfer price is set at $1.15 per unit, determine how much profit Division A will make on the transfer. Determine how much Division B will save by not purchasing the widgets on the open market. (Round your answers to 2 decimal places.) Divison A Profit : (per unit)

Divison B Savings : (per unit) 4. If the transfer price is set at $2.40 per unit, determine how much profit Division A will make on the transfer. Determine how much Division B will save by not purchasing the widgets on the open market. (Round your answers to 2 decimal places.)

Divison A Profit : (per unit)

Divison B Savings : (per unit)

5. What transfer price would you recommend to split the difference? (Round your answer to 3 decimal places.)