Decision on Transfer Pricing Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $233 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 $193 per unit. Assume that a transfer price of $221 has been established and that 37,900 units of materials are transferred, with no reduction in the Components Division's current sales. a. How much would Ziegler Inc.'s total operating income increase? b. How much would the Instrument Division's operating income increase? c. How much would the Components Division's operating income increase? d. Any transfer price will cause the total income of the company to increase materials for products that are ultimately sold to the outside, , as long as the supplier division capacity is used toward making Feedback