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4. Jesse Industries has two divisions: Machining and Assembly. The Assembly Division is looking to buy 20,000 units annually of a specialized component product. They
4. Jesse Industries has two divisions: Machining and Assembly. The Assembly Division is looking to buy 20,000 units annually of a specialized component product. They have received a bid from an outside supplier of $445 per unit. The special components could be produced internally by the Machining Division with variable production costs of $260 per unit. However, to meet the requirements of the Assembly Division, Machining would have to cut back production by 12,000 units of an existing product. This other product sells for $565 per unit, and requires $369 per unit in variable production costs. Required: Should the transfer take place, and if so, what would be the range of acceptable transfer prices
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