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Decision on transfer pricing Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $239 per
Decision on transfer pricing Materials used by the Instrument Division of XPort Industries are currently purchased from outside suppliers at a cost of $239 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 $198 per unit. Assume that a transfer price of $227 has been established and that 32,700 units of materials are transferred, with no reduction in the Components Division's current sales. a. How much would XPort Industries' total income from operations increase? $ b. How much would the Instrument Division's income from operations increase? c. How much would the Components Division's income from operations increase
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