22-26 please provide answers to all parts

YOUT duties and in cost per unit of $400 and the market price reasoning H. W LO 6 1. Net cost (benefit) of purchasing from an external supplier $30,000 as a separate profit centre. Each division manager has been delegated full authority 22-26 Transfer-pricing dispute. The Goodwin Corporation, manufacturer of tractors and other heavy on all decisions involv. farm equipment, is organized along decentralized product lines, with each manufacturing division operating ing the sale of that division's output both to outsiders and to other divisions of Goodwin, Division C has in the past always purchased its requirement of a particular tractor-engine component from Division A. However, when informed that Division A is increasing its selling price to $150, Division C's manager decides to pur- because of the recent installation of some highly specialized equipment and the resulting high deprecia. Division C can purchase the component for $135 per unit in the open market. Division A insists that, Division A's manager appeals to top management of Goodwin for support in the dispute with Division Cand tion charges, it will not be able to earn an adequate return on its investment unless it raises its price. supplies the following operating data: 2,000 units $ 120 $ 20 chase the engine component from external suppliers. C's annual purchases of the tractor-engine component A's variable cost per unit of the tractor-engine component A's fixed cost per unit of the tractor-engine component Required 1. Assume that there are no alternative uses for internal facilities of Division A. Determine whether the acting in their own divisions' best interests take actions that are in the best interest of the company $135 per unit. What should the transfer price for the component be set at so that division managers company as a whole will benefit if Division C purchases the component from external suppliers for 2. Assume that internal facilities of Division A would not otherwise be idle. By not producing the 2,000 as a whole? ations that would result in annual cash-operating savings of $18,000. Should Division C purchase from units for Division C, Division A's equipment and other facilities would be used for other production oper- external suppliers? Show your computations. s for Division A's internal facilities and that the price from 3. Assume that there are no alternative uses price for the component be set at so that division managers acting in their own divisions' best interests outsiders drops $20. Should Division C purchase from external suppliers? What should the transfer I take actions that are in the best interest of the company as a whole? (3