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TM Electronics is a manufacturer with two departments: computer chips and cell phones. The computer chip that is produced in the Chips Department can be sold to customers at $5.75 per chip. The costs associated with the computer chips are as follows: 3 (Click the icon to view the computer chip costs.) The Cell Phone Department has been purchasing the chips that it needs for $3.50 per chip from Chips R Us, but the manager was thinking that if the Chips Department could supply the chips for less than what Chips R Us is asking, then it would arrange a transfer between departments instead of giving the business to an external company. Requirements Requirement 1. Should the Chips Department supply the chips to the Cell Phone Department under these circumstances? Before answering this question, first determine the minimum transfer price. (Round your answer to the nearest cent.) The minimum transfer price is $0 Computer chip costs Requirements 3.25 1.00 1. Should the Chips Department supply the chips to the Cell Phone Department under these circumstances? 2. If the Chips Department had sufficient capacity, would this make a difference? Variable manufacturing costs .. $ Variable selling and administrative costs . $ Capacity... Current production. 600,000 units 600,000 units Print Done Print Done

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