Problem 9.39A (a-c)

Problem 9.39A a-c Ampro 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 needs 10,200 lamps for the coming year and can purchase reading lamps at a cost of $15 from an outside vendor. Division B has the capacity to manufacture 53,200 lamps annually. Sales to outside customers are estimated at 43,000 lamps for the next year. It sells reading lamps for $18 each. Variable costs are $12 per lamp and include $2 of variable sales costs that are not incurred if division B sells lamps internally to division A. The total amount of fixed costs for division B is $79,000. Consider the following independent situations: What should be the minimum transfer price division B accepts for the 10,200 lamps and the maximum transfer price division A pays? Minimum transfer price $ per unit Maximum transfer price $ per unit Suppose division B could use the excess capacity to produce and sell externally 20,400 units of a new product at a price of $12 per unit. The variable cost for this new product is $9 per unit. What should be the minimum transfer price division B accepts for the 10,200 lamps and the maximum transfer price division A pays? Minimum transfer price $ per unit Maximum transfer price $ per unit If division A needs 15,300 lamps instead of 10,200 during the next year, what should be the minimum transfer price division B accepts and the maximum transfer price division A pays? (Round minimum transfer price to 2 decimal places, e.g. 15.25.) Minimum transfer price $ per unit Maximum transfer price $ per unit