In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Y ofthe same company for use in its production process. The managers of the divisions are evaluated based on their divisional prots: Case A B Division X: Capacity in units 100,000 100,000 Number of units being sold to outside customers 100,000 80,000 Selling price per unit to outside customers $50 $35 Variable costs per unit $30 $20 Fixed costs per unit (based on capacity) $8 $6 Division Y: Number of units needed for production 20,000 20,000 Purchase price per unit now being paid to an outside supplier $47 $34 Requhtuk 1-a. Refer to the data in case A above. Assume that $2 per unit in variable selling costs can be avoided on intracompany sales. Determine the transfer price of the selling division. :I 1-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? 0 Yes (\\INo 2-a. 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. 2-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? 0 Yes ONO 2-c. What is the range of transfer price the managers of both divisions should agree