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In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Yof the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits: Division X Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) Division Y Number of units needed for production Purchase price per unit now being paid to an outside Supplier 190,000 190.000 190,000 165,000 $59 544 $30 $29 $10 $9 25,000 25,000 556 $43 Required: 1-o. Refer to the data in case A above. Assume that $2 per unit in variable seling costs can be avoided on intracompany sales Determine the transfer price of the selling division 1-b. If the managers are free to negotiate and make decisions on their own will a transfer take place? Yes NO 2-a. Refer to the data in case B above. In this case there will be no reduction in variable selling costs on intracompany sales. Determine the transfer price of the selling division con 2-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes NO 2.c. What is the range of transfer price the managers of both divisions should agreep The transton price can be lowest of and hest of