Q15Q7

Carol Components operates a Production Division and a Packaging Division. Both divisions are evaluated as profit centers. Packaging buys components from Production and assembles them for sale. Production sells many components to third parties in addition to Packaging. Selected data from the two operations follow: a For Production, this is the price to third parties. b For Packaging, this does not include the transfer price paid to Production. Required: a. Current output in Production is 25,650 units. Packaging requests an additional 7,080 units to produce a special order. What transfer price would you recommend? b. Suppose Production is operating at full capacity. What transfer price would you recommend? c. Suppose Production is operating at 47,760 units. What transfer price would you recommend