## Answered) 50 and 51 use the following information: TEB, Inc., which manufactures video games, consists of two divisions, each operating as a profit center.

50 and 51 use the following information:

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TEB, Inc., which manufactures video games, consists of two divisions, each operating as a profit center. Division A makes a component that is needed by Division B; however, if the price from Division A is too high, Division B has indicated it would purchase the component from an outside supplier. Additional information related to the divisions is:

Division BÃ¢s annual needs for componentÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â 10,000 units

Division As variable cost per unitÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â \$150

Division AÃ¢s annual fixed cost Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â \$1,500,000

Price per unit from outside supplierÂ Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â Â \$160

Assume Division A sells units to outsiders for \$170 each and has over 10,000 units of excess capacity which it cannot use to sell components to outsiders. Also assume both divisions know the overall company will save money by producing the units internally and transferring them from Division A to Division B.

50. The most logical minimum acceptable transfer price is __________?

51. The most logical maximum acceptable transfer price is __________?

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