The Chacon Company is decentralized, and divisions are considered investment centers. Chacon has one division that...

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The Chacon Company is decentralized, and divisions are considered investment centers. Chacon 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. 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 500 chairs per quarter, and the Cushion Division is operating at capacity, which is 500 cushions per quarter. The two divisions report the following information: Chair Division Sales Price per Chair Cushion Division 30 Vanable Cost per Cushion 18 $ 65 Sales Price per Cushion Variable Cost (other than cushion) Variable Cost (cushion) 17 Contribution Margin per Chair Contribution Margin per Cushion 5 SA 30 88 10 20 20 -X Print Done Requirements 1. Determine the total contribution margin for Chacon Company for the quarter. 2. Assume the Chair Division purchases the 500 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 500 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 Chacon Company? 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. -X Print Done Total contribution margin Requirement 1. Determine the total contribution margin for Chacon Company for the quarter Chair Division Cushion Division Number of units Contribution margin per unit Total Requirement 2. Assume the Chur Division purchases the 500 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Chair Division Cushion Division Total Number of units Contribution margin per unit Total contribution margin Requirement 3. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current vanable cost. What is the total contribution margin for each division and the company? (Enter "a for any zero amounts.) Chair Division Number of units Contribution margin per unit Total contribution margin Cushion Division Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Chacon Company? The best option for Chacon is By having the Chair Division purchase the cushions from an outside vendor, the company would generate internally in total contribution margin than if the division purchases cushions Requirement 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning Using the transfer price you determined, calculate the total contribution margin for the quarter. Chacon Company should set the transfer price at because the Chair Division would not be willing to pay more than Using the transfer price you determined, calculate the total contribution margin for the quarter. Chair Division Cushion Division-external Cushion Division-intemal Total Number of units Contribution margin per unit Total contribution margin X The Chacon Company is decentralized, and divisions are considered investment centers. Chacon 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. 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 500 chairs per quarter, and the Cushion Division is operating at capacity, which is 500 cushions per quarter. The two divisions report the following information: Chair Division Sales Price per Chair Cushion Division 30 Vanable Cost per Cushion 18 $ 65 Sales Price per Cushion Variable Cost (other than cushion) Variable Cost (cushion) 17 Contribution Margin per Chair Contribution Margin per Cushion 5 SA 30 88 10 20 20 -X Print Done Requirements 1. Determine the total contribution margin for Chacon Company for the quarter. 2. Assume the Chair Division purchases the 500 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 500 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 Chacon Company? 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. -X Print Done Total contribution margin Requirement 1. Determine the total contribution margin for Chacon Company for the quarter Chair Division Cushion Division Number of units Contribution margin per unit Total Requirement 2. Assume the Chur Division purchases the 500 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? Chair Division Cushion Division Total Number of units Contribution margin per unit Total contribution margin Requirement 3. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current vanable cost. What is the total contribution margin for each division and the company? (Enter "a for any zero amounts.) Chair Division Number of units Contribution margin per unit Total contribution margin Cushion Division Total Requirement 4. Review your answers for Requirements 1, 2, and 3. What is the best option for Chacon Company? The best option for Chacon is By having the Chair Division purchase the cushions from an outside vendor, the company would generate internally in total contribution margin than if the division purchases cushions Requirement 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Chacon Company set? Explain your reasoning Using the transfer price you determined, calculate the total contribution margin for the quarter. Chacon Company should set the transfer price at because the Chair Division would not be willing to pay more than Using the transfer price you determined, calculate the total contribution margin for the quarter. Chair Division Cushion Division-external Cushion Division-intemal Total Number of units Contribution margin per unit Total contribution margin X