ch 24 10

Decision on Transfer Pricing Materials used by the Instrument Division of T_Kong Industries are currently purchased from outside suppliers at a cost of $297 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $247 per unit. a. If a transfer price of $270 per unit is established and 44,900 units of materials are transferred, with no reduction in the Components Division's current sales, how much would T_Kong Industries' total income from operations increase? $ b. How much would the Instrument Division's income from operations increase? $1 c. How much would the Components Division's income from operations increase? $