Choice of transfer price The following information relates to a new computer chip that Hand Held has developed for its new cell phone that contains a personal organizer: The variable costs of the Cell Phone Division will be incurred whether it buys from the Chip Division or from an outside supplier. A. What is the highest price that the managers of the Cell Phone Division would want to pay the Chip Division for the chip? Explain. B. If the Chip Division is working at full capacity and cannot produce additional units, what transfer price for the chip would be best for the company as a whole? Explain. C. If the Chip Division is not operating at capacity and has no prospect of reaching capacity, what is the lowest price its managers would typically be willing to sell chips to the Cell Phone Division