Mapie Rose Leather is a medium size business that specializes in the production of high quality leather and the design and production of leakher wallets. notebook covers and bags. The company has two divisions: the Leather Division and the Accessonies Division. The Leather Division can tonansfer the leathen to the Accessorics Division or it can sell it ro external clicnts. The Leather Division currently produces and selis 262 , 500 5q. ft (square feed per year to external clients at an average price of $28.50 per sq.ft. Variable costs of production average $17 and fixed costs of $11.50 per sq. ft. The- Leather Division incurs $320 of variable selling costs on external sales. Fixed costs are based on the practical capacity of the plant which 315,000 sq. ft per year. The Accesporics Division is interested in acquing up to 52,500 sq, ft per year. Required 1. From the standpoint of Maple Rose Leather, should the leather be transferred? Determine the financial benefit or cost of your recornmendation, (3 markm) 2. Using the general guidelines for transfer pricirg what is the minimum transfer price the Leather Division should accept? (2 marks) 3. What is the range of acceptable transter prices? (3 marks) 4. Now assume that dermand in the external market for the components is expected to increase by 996 . The Accessories Division has nicgotiated with an external supptier to supply 52,500 sq.ft of leather at a price of $25.50 per clement. If the Accessories Division reduces its volume below the 52,500 sq. ft, it musk pay $3550 per sq. ft What is the optimum sourcing arrangement for the compary? (12 marks)