After 10 years in business, Sheffield's Company was making a significant profit on its Whiz-it Blenders. These blenders could whip up a frosty shake or act as a food processor. One key to this product's success is its stainless-steel blade, currently manufactured in-house. The blade division's costs are reported below. It currently only has capacity to supply the internal blender division with these blades. The company has not seriously considered taking these blades to the outside market yet. Direct material $4.00 per unit Direct labor $5.00 per unit Variable-MOH $2.00 per unit Fixed-MOH $5.00 per unit Total $16.00 per unit 

(a) If the market price is a similar stainless-steel blade is $14 per unit, will the blade division and the blender division be interested in setting a transfer price for its blades? If so, within what range with that transfer price fall? Minimum transfer price $ Maximum transfer price $?

Answer rating: 100% (QA)

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