3. External market & limited spare capacity External Market Clean Wash Ltd Industrial Division Soap Division (produces and sells Glycerol) (needs to buy Glycerol to make soap) Glycerol Selling price = $1,000 per tonne Demand = 30 tonnes Limited spare capacity Capacity: 200 tonnes External demand: 190 tonnes Spare Capacity: 10 tonnes Selling Price = $1000 Variable Cost = $700 Contribution Margin = $300 Can buy glycerol (a) internally from Industrial Division, or (b) from external market Depends on comparison between market price and transfer price Variable Cost = $350 Soap Selling price = $1,700 per tonne BA BF 190 # B 17 industrial division # 200 1 unit soap 30 unit Based on industrial level, whether the internal transfer will occur or not when using the general rule to calculate TP? why