ACCT 4233:5233 Transfer Pricing and |final |Eongruence Southern Glass manufactures glass bottles for a variety of products, including perfume bottles and liquor bottles. The company has two profit centers: production and labeling. The production department melts the raw materials, adding metal oxides to produce different colors if desired. It then uses a continuous rolling process to shape the bottles. Production then transfers the bottles to the labeling department at an average cost of $15 [$12 variable; $3 fixed] per case. The labeling department then paints or attaches labels on the bottles at an additional fixed cost of $1 and sells the labeled bottles on the external market at an average price of $31?! per case. Recently, a regional liquor manufacturer contach the managm' of the production department about purchasing '26 of the 25E},DDD cases Southern Glass plans to make in April. The company would like production to start making their specially shaped bottles. They are willing to pay $23 per case. Making the special bottles would not affect the production department's cost but it would require cutting current bottle production by lad; therefore, the labeling department would only label and sell 181,500 labels in April. [1] Will the production department prefer to sell all Z cases internally or sell a (62,509) cases to the liquor manufacturing and as [13? ,SUGJ to the labeling department? [2] Will the labeling department prefer to purchase all 25D,{JDD cases internally or allow production to sell a (62,503] cases to the liquor manufacturing