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:

Refer to the data in case A above. Assume in this case $$2$ 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 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?

Complete this question by entering your answers in the tabs below.

Required $1$ A

Required $1$B

Required $1$ 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?

Identify the range of acceptable transfer prices $($if any$)$:

There is not a range of acceptable transfer prices.

There is a range of acceptable transfer prices as shown below:

$\backslash$table$[[,$Transfer price,$$