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Unless indicated otherwise, assume that each of the following situations is independent: Castle Home Corporation: The Computer Desk Division makes all types of office desks.

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Unless indicated otherwise, assume that each of the following situations is independent: Castle Home Corporation: The Computer Desk Division makes all types of office desks. The variable costs assigned to each desk are $300, including variable manufacturing and selling costs; and annual fixed costs of the division are $900,000. The computer desk sells to the external market for $420. The Palo Alto Division wants to buy 5,000 desks for its custom office design business. If they buy from the market, they will pay $400 per desk after a quantity discount of $20. If the computer Desk Division begins selling to the Palo Alto Division, $50 per unit in sales commission can be avoided. Required: A. Assume that the computer Desk Division is currently producing 10,000 desks per year with a capacity 15,000. From the stand-point of the company as a whole, should the computer desk be transferred internally? If so what should the internal transfer price be? B. A. the Palo Alto Division wants to buy 5,000 desks at $280 for its custom office design The computer Desk manager refused the order because the price is too low. How much will the Corporation's income increase or decrease if Palo Alto Division purchases its desired 5,000 desk from the market for $400 than from Computer Desk Division? C. Assume that the Computer Desk Division is currently selling all it can produced to the external market From the stand-point of the company as a whole, should the computer desk be transferred internally If so what should the internal transfer price be

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