Current Attempt in Progress

Ayayai 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$ from an outside vendor.

Division A needs $8,000$ lamps for the coming year.

Division $B$ has the capacity to manufacture $40,000$ lamps annually. Sales to outside customers are estimated at $32,000$ lamps for the

next year. Reading lamps are sold at $$12$ each. Variable costs are $$7$ per lamp and include $$2$ 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 $$64,000.$

Consider the following independent situations.

$($a$)$

Your answer is partially correct.

What should be the minimum transfer price accepted by Division B for the $8,000$ lamps and the maximum transfer price paid by

Division A$?$

Minimum transfer price accepted by Division B

per unit

Maximum transfer price paid by Division A

eTextbook and Media

Attempts: $1$ of $10$ used

$($b$)$

The parts of this question must be completed in order. This part will be available when you complete the part above.

$($c$)$

The parts of this question must be completed in order. This part will be available when you complete the part above.