multiple business units, organelular equipment from Phoenix Inc., a cellular communication company, has multiple business units, organized as divisions. Each division's management is mpensated based on the division's operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside customers but not to division A at this time. Division As manager approaches division B's manager with a proposal to buy the equipment from division B. If it es the cellular equipment that division A desires, division B will incur variable manufacturing costs of $60 per unit somers but not to Relevant information about Division B Sells 77,500 units of equipment to outside customers at $130 per unit Operating capacity is currently 80%; the division can operate at 100% Variable manufacturing costs are $70 per unit Variable marketing costs are $8 per unit Fixed manufacturing costs are $800,000 Income per Unit for Division A (assuming parts purchased externally, not internally from division B) Sales revenue Manufacturing costs: Cellular equipment Other materials Fixed costs Total manufacturing costs Gross margin Marketing costs: Variable Foed Total marketing costs Operating income per unit 50 $ 140 Required: 1. Division A wants to buy 36.000 units from division B atrope B. Should division B accept or reject the proposal7 How would y be shipped by the same supplier and what would be the net opera would accept partial shipment from division B and what would be the benefit from 2. What is the range of transfer prices over which the divisional managers units from division B at $75 per unit. Determine the contribution margin for each type sale by division Proposal? How would your answer differ if (a) division A requires all 36,000 units in the order to at would be the net operating loss or gain to division B and the firm as a whole, or (b) division A would be the benefit from this alternative to division B? al managers might negotiate a final transfer price? mis question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 2 How would your answer differ if division A requires all 36,000 units in the order to would be the net operating loss or gain to division B and the firm as a whole? Division A requires all 36,000 units Net operating profit/loss to Division B: Total Contribution Forgone contribution of not selling to outside consumers Net operating profit/loss to the firm as a whole: Savings to the firm if Division A buys all 36,000 units Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Req 2 How would your answer differ if division A would accept partial shipment from divisi this alternative to division B? Total capacity of division B Maximum sales possible to outside consumers Remaining Capacity Contribution per unit Total Contribution or benefit from this alternative