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Muharraq Co., has Division A that manufactures and sells a member of parts, including Part XYZ. Data concerning Part XYZ appear below Capacity in units

Muharraq Co., has Division A that manufactures and sells a member of parts, including Part XYZ. Data concerning Part XYZ appear below Capacity in units Selling price to outside customers Variable cost per unit Fixed cost per unit (based on capacity) 55,000 5.95 $35 $20 The company has Division B that could use Part XYZ in one of its products. Division B is curatly purchasing 20,000 of Part XYZ per year from an overseas pplier at a cost of 593 per pa 10 points 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 division (4 marks) b. Assume again that Division A is selling all of Part XYZ it can produce to outside customers. Also assume that 54 is variable expenses can be avoided os tranfers within the company due to reduced shipping and selling outs What is the acceptable range, if any, for the transfer price between the two divisions? [4 marks) e. Based on requirement (a), assume Division A offers to sell 20,000 units so Division B for $115 and that Division Brefuses this price. What will be the less so potential profits for Division A 12 mark)

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