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