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 wits being sold to outside customers 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 240,000 260,000 260,000 235,000 SE 149 $31 $35 58 56 25,000 25,000 $61 545 Required: 1-o. 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 Transfer price 1-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? O 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? Yes O No 2.c. What is the range of transfer price the managers of both divisions should agree? The transfer price can be a lowest of and a highest of