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Problem 10 (Transfer Pricing): Division $ produces, with a maximum capacity of 20,000 units, a product that is needed by Division B. Division B needs
Problem 10 (Transfer Pricing): Division $ produces, with a maximum capacity of 20,000 units, a product that is needed by Division B. Division B needs 5,000 units of such product. Currently, Division $ sells the units for P50, incurs P30 in variable cost per unit and P10 in fixed cost per unit. Division B is currently buying from an outside supplier at P48. If Division S will be selling to Division B it will be able to save on P2 in variable cost
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