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PE 25-6B Transfer pricing obj 5 EL 250 1203 The materials used by the Kenosha Division of Ehrlich Company are currently purchased from outside suppliers
PE 25-6B Transfer pricing obj 5 EL 250 1203 The materials used by the Kenosha Division of Ehrlich Company are currently purchased from outside suppliers at $75 per unit. These same materials are produced by the High Point Division. The High Point Division can produce the materials needed by the Kenosha Division at a variable cost of $55 per unit. The division is currently producing 140.000 units and has capacity of 175,000 units. The two divisions have recently negotiated a transfer price of $65 per unit for 30,000 units. By how much will each division's income increase as a folt of this transfer
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