APPLY THE CONCEPTS: Determining benefits of negotiated transfer price Assume that Selling Division and Buying Division are both owned by Overall Corporation. Selling Division sells a product that is used by Buying Division and outside customers. Selling Division has 20,000 units of excess capacity. Selling Division currently sells the product or 35 eunit and By a Division currently buys 20,000 units of the product from an outside source for $65 per unit. Variable costs of the product are $13, of which $3.25 is the cost of selling the product to an outside customer. Using Selling price less avoidable costs as the minimum price, fill in the following formula for the desired transfer price: transfer price Using Variable costs as the minimum price, il in the following formula for the desired transfer price: transfer price Assume there are no avoidable costs with an internal sale (variable costs equal $13) and that Buying Division buys 20,000 units from Selling Division. Complete the table for each transfer price: