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Decision on Transfer Pricing Materials used by the Instrumhent Division of T Kong Industries are currently purchased from outside suppliers at a cost of

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Decision on Transfer Pricing Materials used by the Instrumhent Division of T Kong Industries are currently purchased from outside suppliers at a cost of $425 per unit. However, the same materia available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variabl cost of $353 per unit. a. If a transfer price of $387 per unit is established and 23,300 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? c. How much would the Components Division's income from operations increase?

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