Homework Chapter 9 Question 13 2 Cosmos 0 www. w Cu MO More info Requirements The Cew mecha GW - 1A Ch S TE wach . D 100 We Dane CM P Do Get Help Me Salve This .Text Pages The Rossi Company is decentralized, and divisions are considered investment centers. Rossi has one division that manufactures oak dining room chairs with upholstered seat cushions The Chair Division cuts, assembles, and finishes the oak chairs and then purchases and attaches the seat cushions Rea THERE Requirement 1. Determine the total contribution margin for Rossi Company for the quarter Number of units Contribution margin per unit Total contribution margin Chair Division 1,600 62 = $ 99,200 Cushion Division 1,600 6 9.600 Total $ 108,800 Requirement 2. Assume the Chair Division purchases the 1.600 cushions needed from the Cushion Division at its current sales price What is the total con Number of units Contribution margin per unit Total contribution margin Chair Division 1600 Cushion Division 1600 Total Requirements 1. Determine the total contribution margin for Rossi Company for the quarter 2. Assume the Chalt Division purchases the 1,600 cushions needed from the Cushion Division at its current sales price What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 1600 cushions needed from the Cushion Division at its current variable cost What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1, 2 and 3. What is the best option for Rossi Company? 5. Assume the Cushion Division has capacity of 3,200 cushions per quarter and can continue to supply its outside customers with 1 600 cushions per quarter and also supply the Chair Division with 1,600 cushions per quarter What transfer price should Rossi Company set? Explain your reasoning Using the transfor price you determined, calculate the total contribution margin for the quarter More Info The Chair Division currently purchases the cushions for $18 from an outside vendor The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company The Chair Division currently sells 1,600 chairs per quarter, and the Cushion Division is operating at capacity, which is 1,600 cushions per quarter. The two divisions report the following information Chair Division $ 20 $ Cushion Division 110 Sales Price per Cushion 30 Variable Cost per Cushion 18 Sales Price per Chair Variable Cost (other than cushion) Variable Cost cushion) Contribution Margin per Chair 14 $ 62 S 6 Contribution Margin per Cushion Print Done Abac An