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PLEASE INCLUDE ANY WORK HANDWRITTEN AND EXPLANATIONS THANK YOU ! 18. Crimson Inc. has...

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Accounting

PLEASE INCLUDE ANY WORK HANDWRITTEN AND EXPLANATIONS THANK YOU !image

18. Crimson Inc. has a number of divisions, including Alpha Division, a producer of circuit boards, and Delta Division, a heating and air-conditioning manufacturer. Alpha Division produces the cb-117 model that can be used by Delta Division in the production of thermostats that regulate heating and air-conditioning systems. The market price of the cb117 is $20, and the full cost of the circuit board is $13. Assume Crimson allows negotiated transfer pricing and Alpha Division can avoid $5 of selling expense by selling to Delta Division. Is the transfer price of $13 acceptable to the Alpha and Delta divisions

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