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In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of

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In each of the cases below, assume Division X has a product that can be sold either 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 Daviston Xi Capacity in units Number of unite being sold to outside customers selling price per unit to outside store Variable costs per unit Fixed coats per unit (based on capacity Division Yu Number of units needed for production Purchase price per unit now being paid to an outside supplier 92,000 102,000 92.000 177.000 57 25 $ 20 $ 3 25,000 25,000 535 Required: 1. Refer to the data in case A obove. Assume in this case that Si per unit in variable selling costs can be avoided on intracompany sales a. What is the lowest acceptable transfer price from the perspective of the seling 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, will transfer probably take place

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