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Tulip Company is made up of two divisionsA and B. Dvision A produces a widget that

Tulip Company is made up of two divisionsA and B. Dvision A produces a widget that Division B uses in the production of its product. Variable cost per widget is $1.00 full cost is $1 .50 Comparable widgets sell on the open market for $2 00 each. Dvision A can produce up to 1.90 milion widgets per year but is currently operating at only 50 percent capacity DMision B expects to use 95,000 widgets in the cumrent year Required: 1, Determine the minimum and maximum transfer prices. (Enter your answers to 2 decimal places.) Minimum Transfer Price Maximum Transfer Price 2. Caiculate Tulip Company's sotal benett of having the widgets transferred between these divisions Total Benedt 3, IT the transfer price is set at $1.00 per unit, determine how much profit Dvision A will make on the transfer Determine how much Dvision B will save by not purchasing the widgets on the open market (Round your answers to 2 decimal places.) Division A Profit per Unit per Unit Division B Savings 4. If the transfer price is set at $2.00 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.) Division A Profit per Unit Dhvision B Savings per Unit 5. What transfer price would you recommend to splt the diference? (Round your answer to 3 decimal places.) Mutualy Beneficial Transfer Price

Feb 06 2020 View more View Less

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