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The Hobson Company is decentralized, and divitions are considered irvestment centers. Hobson has one division that manusactures oak dining room chairs with upholstered seat cushions. The Chair Division cuts, assembles, and finishes the oak chairs and then purchases Bnd Btaches the soat cushions. 1. (Click the icon to view additional infomation.) Pead the reguitements. Requirement 1. Detarmine the total contribution margin for Hobson Company for the quarter, Requirements 1. Determine the total contribution margin for Hobson Company for the quarter. 2. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current sales price. What is the total contribution margin for each division and the company? 3. Assume the Chair Division purchases the 500 cushions needed from the Cushion Division at its current variable cost. What is the total contribution margin for each division and the company? 4. Review your answers for Requirements 1,2 , and 3 . What is the best option for Hobson Company? 5. Assume the Cushion Division has capacity of 1,000 cushions per quarter and can continue to supply its outside customers with 500 cushions per quarter and also supply the Chair Division with 500 cushions per quarter. What transfer price should Hobson Company set? Explain your reasoning. Using the transfer price you determined, calculate the total contribution margin for the quarter. More info The Chair Division currently purchases the cushions for $25 from an outside vendor. The Cushion Division manufactures upholstered seat cushions that are sold to customers outside the company. The Chair Division currently sells 500 chairs per quarter, and the Cushion Division is operating at capacity, which is 500 cushions per quarter. The two divisions report the following information

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