Phoenix incorporated, a cellular communication company, has multiple business units, organized as divisions, Each division's management is compensated 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 A's manager approaches Division B's manager with a proposal to buy the equipment from Division B. If it produces the cellular equipment that Division A desires, Division B will incur variable manufacturing costs of $60 per unit. Relevant information about Division B Sells 82,500 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 $840,000 Income per Unit for Division A (assuming parts purchased externally, not internally from division B) Required: 1. Division A proposes to buy 41,250 units from Division B at $75 per unit. What would be the effect of accepting this proposal on Division B's operating income? What would be the effect on the operating income of Phoenix incorporated as a whole? 2. Now suppose Division A could purchase from multiple suppliers and would accept partiaishipment from Division B. How many units should Division B sell to Division A at $75 per unit, if any? What would be the effect on Division B's operating income? What would be the effect on the operating income of Phoenix incorporated as a whole? 3. What is the sance of transfer prices over which the divisional manacers miaht neaotiate a final transfer price? Required: 1. Division A proposes to buy 41,250 units from Division B at $75 per unit. What would be the effect of accepting this proposal on Division B's operating income? What would be the effect on the operating income of Phoenix Incorporated as a whole? 2. Now suppose Division A could purchase from multiple supplers and would accept partialshipment from Division B. How many units should Division B sell to Division A at $75 per unit, if any? What would be the effect on Division B's operating income? What would be the effect on the operating income of Phoenix Incorporated as a whole? 3. What is the range of transter prices over which the divisional managers might negotiate a final transfer price? Complete this question by entering your answers in the tabs betow. Division A proposes to buy 41,250 units from Division B at $75 per unit. What would be the effect of accepting this proposel on Division B's operating income? What would be the effect on the operating income of phoenix Incorporated as a whole? Required: 1. Division A proposes to biry 41,250 units from Division B at $75 per unit: What would be the effect of accepting this proposal on Division B's operating income? What would be the effect on the operating income of Phoenix Incorporated as a whole? 2. Now suppose Division A could purchase from multiple suppliers and would accept partialshipment from Division B. How many units 2. Now suppose Division A couid purchase from muliple suppliers and woulde accept parisision B sell to Division A at $75 per unit, if any? What would be the effecting income? What would be the effect on the operating income of Phoenix incorporated as a whole? 3. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price? Complete this question by entering your answers in the tabs below. Now suppose Division A could purchase from multiple suppliers and would accept partialshipment from Division B. How many units should Division B sell to Division A at $75 per unit, If any? What would be the effect on Division B's operating income? What would be the effect on the operating income of Phoenix incorporated as a whole? Required: 1. Division A proposes to buy 41,250 units from Division B at $75 per unit What would be the effect of accepting this proposal on Division B's operating income? What would be the effect on the operating income of Phoenix Incorporated as a whole? 2. Now suppose Division A could purchase from multiple suppliers and would accept partialshipment from Division B. How many units should Division B sell to Division A at $75 per unit. if any? What would be the effect on Division B's operating income? What would be the effect on the operating income of Phoenix incorporated as a whole? 3. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price? Complete this question by entering your answers in the tabs below. What is the range of transter prices over which the divisional managers might negotlate a final transfer price