Friendship Greeting Cards has several divisions in a decentralized structure. The Paper Division sells card stock to the Imprint Division. The Paper Division has the following variable costs to preparing a case of card stock: Direct Materials Direct Labor Variable Manufacturing Overhead $26 13 55 The Paper manager set a transfer price using an 85% markup. The Imprint manager did not like the price, and bought 1,000 cases of paper from an outside source for $150 per case. 1. How much was Paper planning to charge Imprint? 2. Why did the Imprint manager buy card stock from an outside source? 3. Did Friendship Greeting Cards gain or lose money as a result of the Imprint manager's decision? How much money did Friendship gain or lose? Show all of your work