$229$ Division B of a company makes units which are then transferred to other divisions. The division has no spare capacity, and sells units externally as well as internally.

Which of the following statement$($s$)$ regarding the minimum transfer price that will encourage the divisional manager of $B$ to transfer units to other divisions is$/$are true?

$(1)$ Any price above variable cost will generate a positive contribution, and will therefore be accepted.

$(2)$ The division will need to give up a unit sold externally in order to make a transfer; this is only worthwhile if the income of a transfer is greater than the net income of an external sale.

A $(1)$ only

B $(2)$ only

C Neither $(1)$ nor $(2)$

D Both $(1)$ and $(2)$