Effect of transfer price on company-level income (OM slides 15-16) a. Example: Division A (the chips division) has total sales of 100,000 chips where 80,000 are sold to external customers for $23 each and 20,000 are transferred to division B (the computer division) for a transfer price of $21 each. The cost of making the 100,000 chips is $1,500,000 in total (partly fixed and partly variable). b. Division B has total computer sales of $2,500,000. Other than buying the chips from division A it has $1,750,000 of other costs. What is the profit of each division? What is the total profit of both divisions