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1.) blank options are motel division or furniture division

2.) blank options are furniture division or motel division

Transfer Pricing Aulman Inc. has a number of divisions including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $60. The manager of the Pumiture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The fut product cost of a dresser is $29. While the Furniture Division has been operating at capacity (50,000 dressers per year) and selling them for $60 each, it expects to produce and sell only 40,000 dressers for $60 each next year. The Furniture Division iscurs variable costs of $13 per dresser The Motal Division needs 10,000 dresses per year, the Furniture Divnion can make up to 50,000 dresses per year. The company policy is that att transfer prices are negotiated by the divisions involved Required: 1. What is the maimum transfer price? which division sets ? 2. What is the minimum transfer price which division 3. Suppose that the two divisions are on a tranfer price of 536. What is the benefit for the Furniture Division? For the Motel Division? For Aulman tot as a whole? Bent to Furniture Division Benefit to Motel Division Benefit to any

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