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The Appraisal Department of Sandhill Mortgage Bank performs appraisals of business properties for loans being considered by the bank and appraisals for home buyers that are financing their purchase through some other financial institution. The department charges $425 per home appraisal and its variable costs are $380 per appraisal. Recently, Sandhill Mortgage Bank has opened its own Home-Loan Department and wants the Appraisal Department to perform 1,400 appraisals on all Sandhill Mortgage Bank-financed home loans. Bank management feels that the cost of these appraisals to the Home-Loan Department should be $410. The variable cost per appraisal to the Home-Loan Department would be $10 less than those performed for outside customers due to savings in administrative costs.

Determine the minimum transfer price assuming that the Appraisal Department has excess capacity.

Minimum transfer price

$enter the minimum transfer price in dollars

Determine the minimum transfer price assuming that the Appraisal Department has no excess capacity.

Minimum transfer price

$enter the minimum transfer price in dollars

Assuming that the Appraisal Department has no excess capacity, should management force the department to charge the Home-Loan Department only $410? select an option YesNo

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