Sorrentino Electronics manufactures motherboards for compute

Sorrentino Electronics manufactures motherboards for computers. The company is divided nto two divisions: manufacturing and programming The manufacturing division makes the transter price has been about $575, resulting in the manufacturing division board, and the programming division makes the adjustments required to meet the customers specifications. The average total cost division is about $525, and the average total cost per board incurred in the programming division is about $100. The average selling price of the boards is $825. The company is now operating at capacity, and increasing the volume of production is not a teasible alternative.(Click the icon to view additional information.) In the t per unit of the boards in the manufacturing $150 per board Each of the managers receives a past, the managers of the two divisions have negotiated a transfer price. The profit of about $50 per board and the programming division recognizing a recognizing a profit of about bonus that is proportional to reported by his or her division Read the requirements ia Libt RsorRequirement (a) What transfer price would you recommend? Why) nication Sorrentino Electronics should allow the seling division a pice of s for the boards Setting this prie w anlow both divisions to recognize a prot alow the manufacturing division\'s profit to absorb the programming division\'s loss allow the organization to maintain the credibiity, the motivational effect, and the economic insights of transfer pricing alow the organization to reduce the cost per unit for each division

Solution

Sorrentino electronics should allow the selling division a selling price of $ 760 as it will allow manufacturing division to absoerb the losses of programming division