Question 1. Structure, nancial performance and transfer pricing The Appliance Company has two product divisions large and small and a corporate division. The large product division makes and sells large appliances such as fridges, freezers, washing machines, etc., while the small product division makes and sell small appliances such as blenders, microwaves, toasters, etc. The corporate division includes the CEO, other executives and support staff; for example, the corporate division provides IT software and support to the two product divisions. For the year ending 31 December 2018, the segmented income statement is as follows: Revenue Variable costs Fixed costs Allocated corporate costs* Division prot Interest Tax (2 8%) Net prot * Note: Large Product Small Product Division $6,800,000 $3, 128,000 -$1,800,000 -$1,360,000 $ 512,000 Division $4,950,000 $2,574,000 -$1,500,000 -$ 990,000 -$ 114,000 Corporate Division $2,400,000 +$2,350,000 -$ 50,000 Total $11,750,000 -$ 5,702,000 -$ 5,700,000 S 0 $ 348,000 -$ 180,000 -$ 47,040 $ 120,960 For 2018, budgeted revenue was $11,500,000 and budgeted corporate costs were $2,300,000. The corporate division's costs were allocated to the product divisions at a rate of $0.20 per dollar of revenue