JSL plc has two divisions, X and Y. For the forthcoming period, the following business activities have been planned and agreed,

Division X is budgeted to produce 10,000 units, selling 7,000 to external customers at $60 per unit, transferring internally 3,000 units to Division Y.

Division Y is budgeted to take 3,000 units from Division X and put them through its own production process before selling all 3,000 units to external customers at $150 per unit.

Division X $000	Division Y $000	Total Company $000
Own Production Costs:
Variable	40	100	140
Fixed	360	100	460
Total	400	200	600

X sets a transfer price at total cost.

Calculate the divisional and the total companys profits and briefly discuss the implications of using total costs as the basis for internal transfer pricing.