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Muhama Ce, has Division A that manufacts and sells a s mber of parts, uncoding Part XYZ. Dha coming Pat XYZ app w 10 pis

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Muhama Ce, has Division A that manufacts and sells a s mber of parts, uncoding Part XYZ. Dha coming Pat XYZ app w 10 pis Capacity in unit Selling price to outside customers Variable cast per unit 55,000 395 $35 Fixed cost per unit (based on capacity) 5:20 The company has Division B that could use Part XYZ in one of its products Division B is cutly purchasing 20,000 of Par XYZ per year from an onneas supplier at a cost of $99 per part Required: a. Assume that Division A is selling all of Part XYZ it can produce to outside customers. What is the acceptable range, if any, for the transfer price between the two divisions? (4 marks] b. Assume again that Division A is selling all of Part XYZ it can produce to outside customers. Also assume that $4 in variable expenses can be avoided on wafers within the company due to reduced shipping and selling costs. What is the acceptable range, if any, for the transfer price between the two divisions? (4 marks] c. Based on requirement (a), assume Division A offers to sell 20,000 units to Division B3 for $115 and that Division B refuses this price. What will be the loss in potemnal profits for Division A [2 marks]

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