16 The next two questions are based on the following: Chips Division of Zetron Electronics Company produces electronic chips that it sells to other companies. Sales and cost data for the chips follow: Capacity in units Current demands from outside customers Selling price per unit Variable manufacturing costs per unit Variable selling cost per unit Fixed costs per unit at capacity 60,000 units 45,000 units s 50.00 per unit s 32.00 per unit s 4.00 per unit s 5.00 per unit Assembly Division of Zetron Electronics Company would like to buy 20,000 units of this chip from Chips n. Assembly Division is presently purchasing the chip from an outside supplier at $43 per unit. If Chips Division sells to Assembly Division, variable selling costs can be avoided. 24 If the Chips Division cuts back on sales to outside customers in order to supply chips to the Assembly Division, what is the lowest acceptable transfer price from the viewpoint of the selling division? A. $43.00 B. $41.00 C. $32.00 D. $35.50 E. None of the above 25 From the standpoint of the entire company, should the transfer take place? B. No. I'the transfer takes place, the company's profit will decrease by $150,000. C. No. If'the transfer takes place, the company's profit will decrease by $40,000 D. Yes. ifthe transfer takes place, the company's profit will increase by $1 50,000. E. Yes. ifthe transfer takes place, the company's profit will increase by $40,000. It does not matter, because the company's profit will be the same regardless of whether the transfer takes place