LICK HERE TO SAVE YOUR WUR Neko Company's Electrical Division produces a high quality transformer. Sales and cost data on the transformer follow. Selling price per unit on the outside market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $40 $21 $9 50,000 Neko Company has a Motor Division that would like to begin purchasing this transformer from the Electrical Division. The Motor Division is currently purchasing 10,000 transformers each year from another company at a cost of $36 per transformer. The supplier gives the Motor Divsion a 5% discount. Required: 1. Assume that the Llectrical Division is now selling 50,000 transformers each year to outside customers. Will a transfer take place? a) Calculate the minimum and maximum transfer prices. (3 marks) from the perspective of the Minimum transfer price from the perspective of the Maximum transfer price b) Are the managers of the two divisions likely to voluntarily agree to a transfer price for 10,000 transformers each year? (1 mark) I New A b) Are the managers of the two divisions likely to voluntarily agree to a transfer price for 10,000 transformers each year? (1 mark) Transfer: 2. Now assume that the Electical Division is currently selling 46,000 transformers to outside customers and there are $2 in variable cost savings on internal sales. a) Calculate the minimum and maximum transfer prices. (3 marks) Supporting calcuations Minimum transfer price Maximum transfer price b) Are the managers of the two divisions likely to voluntarily agree to a transfer price for 10,000 transformers each year? (1 mark) Transfer