In each of the cases below, assume Division $x$ has a product that can be sold to outside customers or to Division $Y$ of the same company. The managers of the divisions are evaluated based on their divisional profits.

Required:

$2.$ Refer to the data in case $B$ above. In this case, there will be no savings in variable selling costs on intracompany sales.

a$.$ 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?

c$.$ 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, will a transfer probably take place?