4 Question 1- Transfer Pricing: 557 6 Suppose Division A produces a single component for variable costs of $25 per component, which it sells externally for $30. a Division B purchases a component like the one B manufactures but from an outside supplier for $28 per unit. 10 Division A has sufficient capacity to satisfy Division B's demand. 31 12 Part 1: 13 14 1. What is the Minimum Transfer Price for Division A (the selling division)? 15 16 2. What is the Maximum Transfer Price for Division B (the buying division)? 17 18 3. Should the transfer be allowed to take place? Why or why not? 19 20 4. What method would work best here (cost, market, negotiated) Question 1 Question 2