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# a Exercise 22-16 Crede Inc. has two divisions. Division A makes and sells student desks. Division B manufactures and sells reading lamps. Each desk

a Exercise 22-16 Crede Inc. has two divisions. Division A makes and sells student desks.
Division B manufactures and sells reading lamps. Each desk has a reading lamp as one of its components. Division A can
purchase reading lamps at a cost of \$ 10.4? from an outside vendor.
Division A needs 12,000 lamps for the coming year. Division B has the capacity to manufacture 50,900 lamps annuallv. Sales
to outside customers are estimated at 33.900 lamps for the next vear.
Reading lamps are sold at \$ 11.95 each. variable costs are \$ 6.?0 per
lamp and include \$ 1.33 of variable sales costs that are not incurred if
lamps are sold internallv to Division A. The total amount of fixed costs
for Division B is \$ 04,?00 . Consider the following independent situations. What should be the minimum transfer price accepted by Division B for
the 12,000 lamps and the maximum transfer price paid bv Division A?
(Round answers to 2 decimal' places, e.g. 10.50.) I'I'linimum transfer price accepted bv Division E \$ D-EF unit
I'I'leximum transfer price paid is; Division A i :] per um Suppose Division B could use the excess capacitv to produce and sell
externally 20,400 units of a new product at a price of \$ 190 per unit.
The variable cost for this new product is \$ 5.30 per unit. What should be
the minimum transfer price accepted by Division B for the 12,000 lamps
and the maximum transfer price paid by Division A? (Round answers
to 2 decimal places, e.g. 10.50.) Minimum transfer price accepted bv Division E \$ :] par unit
Maximum transfer price paid 0v Division A \$ :] per unit If Division A needs 15,900 lamps instead of 12,000 during the next vear,
what should be the minimum tiansfer price accepted bv Division B and
the maximum transfer price paid bv Division A? (Round answers to .2
decimai' places, e.g. 10.50.} Minimum o'snsi‘er price accepted bi- Division E \$ [:1 per unit
Maximum transfer price paid by Division A \$ Per. unit

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