Better Homes Products$$ Canadian operations are organized into two divisions: West and East. West division sells a component that could be used by East Division in making one of the company$$s principal products. East Division has obtained three price quotations from external suppliers for the component: $$154,$ $$138,$ and $$143.$ Examination of West Division$$s accounting records pertaining to the production of the component reveals the following costs: direct material $$56,$ direct labour $$44,$ variable overhead, $$18$; and fixed overhead, $$25.$

Required:

As chief accountant, you have been directed by the CEO to determine the following:

a$.$ What savings $($or profit$)$ would be available to Better Home Products if East Division bought the component internally rather than externally?

b$.$ What would the transfer price be if the two divisions agreed to split the total company savings evenly between them?

c$.$ Assuming dual transfer pricing is used, set the maximum realistic price for West Division and the minimum realistic price for East Division.