Exercise 11-13 (Algo) Transfer Pricing Situations (LO11-3) The following information applies to the questions displayed below) In each of the cases below, assume Division X has a product that can be sold ether to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits Case D Division X Capacity in unita Number of unite being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed coats per unit based on capacity) Division Yi Number of units needed for production Purchase price per unit now being paid to an outside supplier 100,000 100,000 $ 58 $ 20 S. 96,000 77,000 $ 28 15 $5 19,000 19.000 $49 5.30 Exercise 11-13 (Algo) Part 1 Required: 1. Refer to the data in case A above. Assume in this case that $4 per unit in variable selling costs can be avoided on intracompany sales What is the lowest acceptable transfer price from the perspective of the selling division? b. What is the highest acceptable transfer price from the perspective of the buying division? What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own, wil a transfer probably take place? Complete this question by entering your answers in the tabs below. Req1A Reg 10 Reg 10 What is the lowest acceptable transfer price from the perspective of the selling division? Lowest atteptable transfer price Reg 18 ) wy Complete this question by entering your answers in the tabs below. Reg 1A Reg 13 Reg 1 what is the highest acceptable transfer price from the perspective of the buying division Mont complete transfer prion