B prod.reader-ui.prod.mheducation.com EXERCISE 11-7 Transfer Pricing from the Viewpoint of the Entire Company LO113 a Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board $125 Variable cost per circuit board $90 Number of circuit boards: Produced during the year 20,000 Sold to outside customers 16,000 Sold to Division B 4,000 Sales to Division B were at the same price as sales to outside customers. The circuit boards purchased by Division B were used in instrument and then sold the instruments for $300 each. Required: 1. Calculate the net operating incomes earned by Division A, Division B, and the company as a whole. 2. Assume Division A's manufacturing capacity is 20,000 circuit boards. Next year, Division B wants to purchase 5,000 circuit boar , from Division A rather than 4,000. (Circuit boards of this type are not available from outside sources.) From the standpoint of th M customers? Explain