Controls Division of Electric Motors Corp. manufactures a starter with the following standard costs: The standard direct labour rate is $15 per hour, and overhead is ass g ned at 50N of the direct labour rate. Normal direct la bour hours are 20,000 , and the overhead rate is $2.50 variable and $5 fixed per direct labour hour. The starters sell for $75 and Controls Division is currentiv operating at 16,000 direct labour hours for the year. All trans/ers in Electric Motor Corp. are made at market price. If mutually agreed upon, the divisional managers are permitted to negotiate a transfer price. Motor Division currenthy purchases 2,000 starters annually from Controts Division at the market price. The divisonal manager of Motor Division indicates he can purchase the starters from a foresn supplier for $65. 8ecause he can use external suppliers, he has indicated that he wants to negotiate a new transfer price with Controls Division. The Cortrols Division manager states that the believes that the foreign supplier is attempting to "buy in" by selling the starters at an excessively low price. Required: From the point of view of Controls Dhision, how much will its net income change if Motor givision purchases the starters are purchased from the foreign supplier? What is the minimum price at which Controls DWulan would transfer the starters to Motor Division? that is the change in the net income of Controls Division if the transfers are made to Motor Division at 565 a unit