12 Required information The following information applies to the questions displayed below) In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. ME Graw Case Division Capacity in units 92,000 92,000 Wumber of units being sold to outside customers selling price per unit to outside gusto 92,000 15,000 351 26 Variable eats per unit $30 16 Fixed couts per unit thesed on capacity) " 4 Division Y Number of units needed for production 17,000 17,000 Purchase pries per unit now being paid to an outside supplier 847 832 Required: 1. Refer to the data in case A above. Assume in this case that $1 per unit in variable selling costs can be avoided on intracompany sales a What is the lowest acceptable transfer price from the petspective of the selling division? b. What is the highest acceptable transfer price from the perspective of the buying division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make- decisions on their own, will a transfer probably take place? Complete this question by entering your answers in the tabs below. < Prev of 5 Next >