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 of the 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 120,000 120,000 Number of units being sold to outside customers 120,000 96,000 Selling price per unit to outside customers $ 52 $ 36 Variable costs per unit $ 40 $ 12 Fixed costs per unit (based on capacity) as 10 $ 8 Division Y: Number of units needed for production 24,000 24,000 Purchase price per unit now being paid to an outside supplier $ 48 $ 35 Required: 1-a. Refer to the data in case A above. Assume that $3 per unit in variable selling costs can be avoided on intracompany sales. Determine the transfer price of the selling division. 1-b. If the managers are free to negotiate and make decisions on their own. will a transfer take place? A Yes A No 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? O Yes ONO 2-c. What is the range of transfer price the managers of both divisions should agree