Computer chip costs Variable manufacturing costs ....... 69 Variable selling and administrative costs. $ Capacity...... Current production 2.40 0.80 500,000 units 500,000 units TK Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $5.00 per chip. The costs associated with the computer chips are as follows: (Click the icon to view the computer chip costs.) The Cell Phone Department has been purchasing the chips that it needs for $2.75 per chip from Chips R Us, but the manager was thinking that if the Chips Department could supply the chips for less than what Chips R Us is asking, then it would arrange a transfer between departments instead of giving the business to an external company. If the Cell Phone Department needs 150,000 computer chips and current production in the Chips Department is 300,000 chips, should a transfer take place? If so, at what price? (Note: For internal transfers, the selling and administrative costs are reduced to $0.25 per unit.) What other qualitative factors might need to be considered? The minimum transfer price is $ The internal transfer take place. The price for the internal transfer should fall between $ and S First, let's determine if a transfer should take place. Begin by determining the minimum transfer price. (Round your answer to the nearest cent.) The minimum transfer price is $ The internal transfer take place. The price for the internal transfer should fall between $ and S What other qualitative factors might need to be considered? Other factors to consider would be the relationship that the Cell Phone Division has with its will the Cell Phone Division be able to If the Chips Division is only able to transfer chips for additional orders? The Chips Division may also require some downtime for equipment maintenance or other things (perhaps summer vacations for employees, for example) and a reduced workload for a short period may be