Can you answer the question attached?

Waccer Industries transfer pricing, responsibility centres Waccer Industries has production and warehousing facilities across North America. It produces and sells a variety of electric and gas powered products for both home and commercial use. Waccer's mission stresses quality, reliability, and responsible stewardship. During the most recent planning session, senior management decided to focus on brand awareness while pursuing systematic growth. Production business units are treated as autonomous investment centres responsible for maintaining return on investments. As part of its growth strategy, Waccer recently acquired a wellrespected pump manufacturing company, Pucher Pumps, now known as the pump division (PD). Arianna Krantz, production manager for the commercial mechanical division (CMD), currently purchases pumps from an outside supplier for $200 for use in the company's bestselling commercial compressor. Pucher Pumps, arguably the best in the industry, were more expensive but now that Pucher is part of the Waccer family Arianna is confident that she will be able to acquire them at a more reasonable price. However, when she received the quote from Marco Chan, manager of the PD, the price was $220 each for the 500 pumps that Arianna needs. Arianna is surprised by the price because this is $13 more than when Pucher was independent. She knows that Waccer encourages business units to cooperate, seeking optimal synergetic solutions. If she transfers the pumps from the PD, she will be upholding the company's policy on quality. Marco Chan worked for the Pucher Pumps for several years before it was acquired by Waccer. The PD has sufficient idle capacity to handle Arianna's order and Marco is being encouraged to make better use of his facilities. As well he knows that senior management would be pleased to see the divisions working together to produce a quality product. But Marco is frustrated by Waccer's cost structure. The allocated fixed manufacturing overhead is $4.00 per machine hour higher than when Pucher Pumps was independent. In order to establish selling prices, Waccer uses a costplus30% policy. This external selling price is also used as a transfer price between divisions. The job cost sheet and sales quote for the pump specified by Arianna is shown below: SKU* Quantity Unit X23489 6 Each Cost 7.90 Total $ 47.40 R45165 2 Each 7.12 14.24 S3459 14 Each 0.85 11.90 T56784 8 Kilogram (kg) 0.97 7.76 Other direct materials 8.13 Variable overhead 4 Machine hours 3.48 Fixed overhead** 4 Machine hours 16.50 Full cost Markup Selling price 13.92 66.00 169.35 30% 50.81 $220.16 * Stock keeping unit ** Plantwide fixed manufacturing overhead based on capacity. Required a. Will Arianna accept Marco's quote of $220? Why or why not? b. Arianna suggests she will buy her pumps from PD if Marco will lower his selling price to $190. What will the effect be on PD's net operating income if Marco agrees to sell the pumps to CMD at this price? c. If Marco refuses to lower the selling price from $220, will the company be better or worse off? By how much? d. As an external consultant, what advice would you give to Waccer's senior management