6 Required Information Exercise 11-13 (Algo) Transfer Pricing Situations [LO11-3] [The following Information applies to the questions displayed below.] Part 2 of 2 In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use In its production process. The managers of the divisions are evaluated based on their 3.55 divisional profits. points Case B 02:22:35 Division X: Capacity in units 101, 606 102,900 Number of units being sold to outside customers 101 ,800 87,006 selling price per unit to outside customers $ 58 $ 35 Variable costs per unit $ 21 17 Book Fixed costs per unit (based on capacity) $ 7 $ 5 Division Y: Number of units needed for production 15,090 15,090 Hint Purchase price per unit now being paid to an outside supplier $ 53 $ 34 Print Exercise 11-13 (Algo) Part 2 References Required: 2. Refer to the data In case B above. In this case, there will be no savings in variable selling costs on intracompany sales. a. What is the lowest acceptable transfer price from the perspective of the selling division? b. What is the highest acceptable transfer price from the perspective of the buying division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own. will a transfer probably take place