Problem 11-20 (Algo) Transfer Price with an Outside Market [LO11-3] Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow: Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 5,300 tons of pulp per year from a supplier at a cost of $69 per ton. Hrubec's president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price. Suppose the Carton Division's outside supplier drops its price to only $65 per ton. Should the Pulp Division meet this price? Should the Pulp Division meet this price? If the Pulp Division does not meet the $65 price, what will be the effect on the profits of the company as a whole? Refer to requirement 4. If the Pulp Division refuses to meet the $65 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? Should the Carton Division be required to purchase from the Pulp Division Refer to requirement 4. Assume that due to inflexible management policies, the Carton Division is required to purchase 5,300 tons of pulp each year from the Pulp Division at $76 per ton. What will be the effect on the profits of the company as a whole