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Ok Substit The capy has Devrim B Rec Capacity in Sangri MON SHI 526 10 priet At the Divi Aiming at Division Asseling all of
Ok Substit The capy has Devrim B Rec Capacity in Sangri MON SHI 526 10 priet At the Divi Aiming at Division Asseling all of Pan XYZ a pods Alot in lepas beded en trawie prydes wedding and the aptable, if sy Re the rear pica beather (4 al Division Ass 20,000 to Dison B for 5115 and that Dive price. What with the lopp DA12 Forthea prenor BING Ar # Th mt 10 Muharraq Co, has Division A that manufactures and sells a number of parts, including Part XYZ. Data conceming 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 $95 $55 $20. The company has Division B that could use Part XYZ in one of its products. Division B is currently purchasing 20,000 of Part XYZ per year from an overseas supplier at a cost of $93 per part 10 points Seve Ace 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 54 in variable expenses can be avoided on transfers 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] e. Based on requirement (a), assume Division A offers to sell 20,000 units to Division 1 for $115 and that Division B refuses this price. What will be the loss in potential profits for Division A? [2 marks) For the toolbar, press ALT-F10 (PC) or ALT+FN+F10 (Mad
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