PROBLEM 11-25 Basic Transfer Pricing LO11-3 Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment (ROI). Assume the following information relative to the two divisions: Case 1 2 3 4 Alpha Division: Capacity in units. Number of units now being sold to outside 80,000 400,000 150,000 300,000 customers 80,000 400,000 100,000 300,000 Selling price per unit to outside customers Variable costs per unit $30 $90 $75 $50 $18 $65 $40 $26 Fixed costs per unit (based on capacity) Beta Division: $6 $15 $20 $9 Number of units needed annually 5,000 30,000 20,000 120,000 Purchase price now being paid to an outside supplier $27 $89 $75 Required: 1. Refer to case I shown above. Alpha Division can avoid $2 per unit in commissions on any sales to Beta Division. What is Alnha Divisions's lowest acceptable transfer price?