Wallen Products Inc. has just purchased a small company that specializes in the manufacture of electronic tuners that are as a component part of LCD TVs. The new division, called the Tuner Division, has the following revenue and costs associa with each tuner that it manufactures and sells: $40 2 3 Selling price Expenses: Variable Fixed (based on capacity) Operating income $25 $10 $35 $5 The Tuner Division has an annual capacity of 50,000 tuners. Wallen Products also has an Assembly Division that assembles TVs. This division is currently purchasing 10 from an overseas supplier at a cost of $40 per tuner, less a 15% purchase discount. The president of Wall anxious to have the Assembly Division begin purchasing its tuners from the newly acquired Tuner Divisi a Required: is selling all its output to outside TV manufacturers at the regular selling pric aynidable on internal sales. Will a transfer take place?

anxiouS LA Required: 1. The Tuner Division is selling all its output to outside TV manufacturers at the regular se that $8 per tuner of variable expenses are avoidable on internal sales. Will a transfer tak a) Calculate the miniumum and maximum transfer prices. (3 marks) from the perspective of the Minimum transfer price from the perspective of the Maximum transfer price b) Are the managers of the two divisions likely to voluntarily agree to a mark)