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38 - 22-34(Cont'd The contribution margin per unit from...

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22-34 (Cont’d.) The contribution margin per unit from producing Super-chips for the process- control unit exceeds the contribution margin of $16 from producing 4 Okay-chips, each yielding a contribution margin of $4 per unit. Hence the Semiconductor Division should transfer 5,000 Super-chips as the following calculations show: Alternative 1—No transfer (and, therefore, no sales of process-control units) Sell 15,000 Super-chips at contribution margin per unit of $30 $450,000 Sell 40,000 Okay-chips at contribution margin per unit of $4 160,000 $610,000 Alternative 2—Transfer 5,000 Super-chips. Sell 15,000 Super-chips at contribution margin per unit of $30 $450,000 Sell 20,000 Okay-chips at contribution margin per unit of $4 80,000 Sell 5,000 control units at contribution margin per unit of $18 90,000 $620,000 Therefore, if the price for the control unit is uncertain, the transfer price must be set at
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