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

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In each of the cases below, assume that Division X has a product that can be sold elther 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. Division X: Capacity in units Number of units being sold to outside customers 100000 Selling price per unit to outside customers $56 $30 $20 $17 Variable costs per unit $9 Foxed costs per unit (based on capacity Division Y 25.000 25,000 Number of units needed for production Purchase price per unit now being paid to an Required that S3 per unit in variable selling costs can be 1-a. Refer to the data in case A above. Assume in this case avoided on intracompany sales. Transfer price 2

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