Business, 27.11.2019 01:31 personm21

The watkins company is decentralized, and divisions are considered investment centers. watkins specializes in sportsequipment, and one division manufactures netting that is used for basketball hoops, soccer goals, and other sports equipment. the netting division reports the following information for aheavy-duty basketball hoop net:

sales price per unit

$18

variable cost per unit

6

contribution margin per unit

$12

the basketball equipment division can purchase a similarheavy-duty net from an outside vendor for $15.

1.

determine the negotiable range for the transfer price.

2.

what is the minimum transfer price the netting division should consider if operating at capacity? below capacity?

3.

what is the maximum transfer price the basketball equipment division should consider?

Answers: 3

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