The Marcus Company has two divisions, X and Y. Division X produces an engine used in the finished product of Division Y. The intermediate product produced by Division X has a known market price of $100. Currently, Division X is running at 60% capacity.

The following data pertains to the two divisions: pki69

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DIVISION X Transfer price of engine (market price).. $100 Cost to produce one engine (fixed and variable costs).... DIVISION Y $60 Selling price of finished product. Cost to complete intermediate product (fixed and variable costs). $150 $75 Required: a Show the contribution to company profit per unit for each division using the transfer pricing method of the company. b Show whether the final product produced by the company has a positive or negative contribution C to the firm as a whole. Assume the remaining capacity of Division X will be adequate to meet the demands of Division Y. If Division X had the opportunity to sell its current output to an outside firm, should it do so?