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Wilson Corp is a decentralized company that rewards division managers based on divisional prots. The Urban Division has monthly capacity to produce 2,500 units a month of a component that it can sell to outside customers or transfer to another division within the rm. {Assume the Urban Division does not have the ability to expand capacity for this problem.) When Urban is operating at capacity, the unit cost of manufacturing the component is as follows: Variable costs $12 Fixed overhead $ Total costs $22 Urban currently produces and sells 2,000 units per month to outside customers for $30 apiece. In generating these external sells. Urban incurs a selling! marketing cost of $2 per unit. Another division in the rm, the Rural Division, has developed a consumer product that will use the component produced by the Urban Division. Rural is determining whether to source the component from the Urban division or use an outside supplier. The component provided by the outside supplier would be of the same specs and quality as the component produced by Urban. The outside supplier has offered Rural 2,500 monthly units of the component for $27 per unit. Monthly orders of less than 2,500 units would cost the Rural Division $30 per unit. The Rural Division will use 2,500 units of the component to make nished goods each month. Without subtracting the cost of the components. Rural will generate a total contribution of $250,000. {In other words, Rural's total contribution is equal to $250,000 minus the total cost of the components.) The Rural Division's manager has approached the Urban Division manager with an offer to purchase the entire 2,500 units from the Urban Division for a cost of $26 per unit. If this internal transaction is completed, the Urban Division would not incur the $2 per unit selling costs. Required: Analyze the effect of this offer considering the following: 1. Is the Urban Division better or worse off by accepting the offer to sell 2,500 units internally for $26 each? {5 points. You must provide the calculations that justify your answer for credit. 50% partial credit may be awarded for using a correct approach.) 2. How much is the corporation as a whole better or worse off if the transaction is completed internally as opposed to each division dealing externally? {5 points. You must provide calculations thatjustify your answer for credit. 50% partial credit may be awarded for using a correct approach} 3. What is the highest price the Rural Division would consider paying the Urban Division for the component? [5 points. You must provide calculations that justify your answer for credit. 50% partial credit may be awarded for using a correct approach.)