e Secure https://mybusinesscourse.com/plat myBusiness Course QUESTION 10 incomplete answer Points out 500 Fagquestio Appropriate Transfer Prices: Opportunity Costs of pound Plains Peanut Butter company recently acquired a peanut processing company that has a normal annual capacity 4 and that sold 2,900,000 pounds last year at a price pound. The purpose of the acquisition is to furnish peanuts for the peanut butter plant, which needs 1.soo.000 pounds of peanuts per year, t has been purchasing peanuts from suppliers at the marke price. Production costs per pound of the peanut-processing company are as follows: $0.50 Direct labor Variable overhead Fixed overhead at normal capadty 0.18 Management is trying to decide what transfer price to use for sales from the newly acquired Peanut Division to the Peanut Butter Division. The manager of the Peanut Division argues that $2.00, the market price, is appropriate. The manager of the Peanut Butter Division argues that the cost price of s1.04 (or perhaps even less should be used since fixed overhead costs should be recomputed. Any output of the Peanut DMsion up to 2.900,000 pounds that is not sold to the Peanut Butter Division could be sold to regular customers at $2.00 per pound. (a) Compute the annual gross profit for the Peanut Division using a transfer price of $2.00. (b) Compute the annual gross profit for the Peanut Division using a transfer price of s1.04