Becker Company has two divisions, Hawley and Rollag. Hawley produces an item that Rollag could use in its production. Rollag currently is purchasing 25,000 units from an outside supplier for $15 per unit. Hawley is currently operating at less than its rated capacity of 620,000 units and has variable costs of $8 per unit. The full cost to manufacture the unit is $11. Hawley currently sells 450,000 units at a selling price of $19 per unit.
a.What will be the effect on Becker Company's operating profit if the transfer is made internally? (Input the amount as positive value. Omit the "tiny_mce_markerquot; sign in your response.)
(Click to select)Less profit or More profit $
b.What is the minimum transfer price from Hawley's perspective? (Omit the "tiny_mce_markerquot; sign in your response.)
Minimum transfer price $
c.What is the maximum transfer price from Rollag's perspective? (Omit the "tiny_mce_markerquot; sign in your response.)
Maximum transfer price $