Please do not give solution in image format thanku Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps.Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10.47 from an outside vendor. Division A needs 12,000 lamps for the coming year.Division B has the capacity to manufacture 50,900 lamps annually. Sales to outside customers are estimated at 38,900 lamps for the next year. Reading lamps are sold at $11.96 each. Variable costs are $6.78 perlamp and include $1.38 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $84,700.Consider the following independent situations.(a)What should be the minimum transfer price accepted by Division B for the 12,000 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal places, e.g. 10.50.)Minimum transfer price accepted by Division B$Maximum transfer price paid by Division A$per unitper unit

When a transfer is made from one division of the entity to another division of the entity then the…

Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10.47 from an outside vendor. Division A needs 12,000 lamps for the Division B has the capacity to manufacture 50,900 lamps annually. Sales to outside customers are estimated at 38,900 lamps for the next year. Reading lamps are sold at $11.96 e lamp and include $1.38 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $84,700. Consider the following independent situations. (a) What should be the minimum transfer price accepted by Division B for the 12,000 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal place Minimum transfer price accepted by Division B Maximum transfer price paid by Division A per unit per unit

Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can purchase reading lamps at a cost of $10.47 from an outside vendor. Division A needs 12,000 lamps for the Division B has the capacity to manufacture 50,900 lamps annually. Sales to outside customers are estimated at 38,900 lamps for the next year. Reading lamps are sold at $11.96 e lamp and include $1.38 of variable sales costs that are not incurred if lamps are sold internally to Division A. The total amount of fixed costs for Division B is $84,700. Consider the following independent situations. (a) What should be the minimum transfer price accepted by Division B for the 12,000 lamps and the maximum transfer price paid by Division A? (Round answers to 2 decimal place Minimum transfer price accepted by Division B Maximum transfer price paid by Division A per unit per unit

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 4CE

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