In each of the cases below, assume that Division X has a product that can be sold elther to outside customers or to Division 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 its being sold to outside custos Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) Division Y Number of units needed for production Purchase price per unit now being paid to an outside supplier 260.000 200.000 260,60 235,000 566 549 $31 $35 18 $6 25,000 25,000 $48 Required: 1-a. Refer to the data in case A above. Assume that $4 per unit in variable selling costs can be avoided on intracompany sales Determine the transfer price of the selling division Transfor price 1-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes 1-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes ONo 2-o. Refer to the data in case B above. In this case there will be no reduction in variable selling costs on intracompany sales. Determine the transfer price of the seling division Transfer price 2-b. If the managers are free to negotiate and make decisions on their own, Will a transfer take place? Yes ONo 2-c. What is the range of transfer price the managers of both divisions should agree? The transfor price can be a lowest of and a highest of 1-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes O No 2-o. Refer to the data in case B above. In this case there will be no reduction in variable selling costs on intracompany sales. Determine the transfer price of the selling division Transfer price 2-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? O Yes O No 2-c. What is the range of transfer price the managers of both divisions should agree? Tho transfer price can be a lowest of and a highost of