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Future Industries operates as a decentralized, vertically integrated, multidivisional company. One of its divisions, the systems division, manufactures scientific instruments and uses the products of two of the other divisions. The board division manufactures printed circuit boards (PCBs). It makes one PCB model exclusively for the systems division using proprietary designs and sells less complex models to outside markets. The transistor division sells its products in a well-developed competitive market and also to the systems division. The costs per unit of the two products the systems division uses are as follows: PCB $7.50 13.50 6.00 2.40 Transistor $1.60 2.00 Direct material Direct labour Variable overhead Fixed overhead Total cost 1.00 1.50 $6.10 $29.40 The board division sells its commercial product at total cost plus a 25% markup and believes that the proprietary board it makes for the systems division would sell for $36.75 per unit on the open market. The market price of the transistor used by the systems division is $7.40 per unit. Question 5 of 9 CIIVISTON IS 37.40 per unit. -/15 (a) Using the general approach to transfer pricing, determine the minimum transfer price at which the transistor division would sell the transistor to the systems division. (Round answer to 2 decimal places, s. 15.25.) Minimum transfer price if the transistor division has excess capacity Minimum transfer price if the transistor division is operating at full capacity $ Save for Later Attempts: 0 of 1 used Submit

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