In Cases 1 to 3 below, assume that Division A has a product that can be sold either to Division B of the same company or to outside customers. The managers of both divisions are evaluated based on their own division's ROI. The managers are free to decide if they will participate in any internal transfers. All transfer prices are negotiated. Treat each case independently:

Division A: Capacity in units 50,000 Number of units now being sold to outside customers 50,000 Selling price per unit to outside customers Variable costs per unit 5 63 Fixed costs per unit 5 100 {based on capacity] 5 25 Division B: Number of units needed 10:00" annually Purchase price now being paid to an outside supplier 5 92 $ $ $ 300,000 300,000 40 19 3 70,000 39 100,000 75,000 60 35 17 20,000 60* $ $ $ 200,000 200,000 45 30 6 60,000