QUESTION 4: PROBLEM 24 marks Gulf Engineering (GE) has two divisions. The fabrication division transfers partially completed components to the assembly division at a predetermined transfer price. The fabrication division has a variable production cost of $140 per component and a fixed cost of S80 per component. The transfer price has been set by the CEO of Gulf Engineering for the partially completed components of the Fabrication division a 20 er component. The fabrication' division has no excess sapacity and could sell all of its partially completed components to outside buyers at a price of $320 per component in a perfectly compeistive market. Assemablty division hod a special offer fs 0per unit for ts product. The Assembly division og to the transfer price for the fabrication division's special offer of $300 incurs variable costs of $90 per unit in additi Determine a transfer price for fabrication division using the general rule.5 marks a. What would be the transfer price if Fabrication division had excess capacity using the b. c. If Assembly division has excess capacity should the Manager of Assembly division accept the oder? And why?................................................-a d. If Assembly division accepts the special order? How much contribution will GE . marks marks e. How can the situation be remedied using the transfer price'?.4 marks 920