2. Company A, one of the divisions within a group of companies, manufactures a component for Company B, another division within the group. In the next period, Company B anticipates a requirement for 10,000 units of the component. The component is currently purchased from Company A at a transfer price based on the full cost. At the expected level of demand, the costs of Company A supplying the component to Company B in the next period are expected to be: Variable cost RM3.70 per unit Fixed cost RM18,000 for the period Company A would like to change the basis for the calculation of the transfer price of the component in order to make a profit. However, an increase in the transfer price is being resisted by Company B, especially as the component is also available from a supplier outside the group at a cost price of RM5.20 per unit. Required: a. Calculate the transfer price for the component for the next period if based on the full cost. b. Calculate whether the group would gain or lose in the period if Company B purchased the component entirely from the outside supplier. C. Assume that purchase of the component, by Company B, entirely from the outside supplier would release capacity in Company A. This surplus capacity could be used to generate a contribution of RM20,000 in the period on another component. Determine the effect on group profit, and the effect on the profit of each of the two divisions, in these circumstances