Problem Set 3: Transfer Pricing Decisions (10 points) The Fabrication Division of American Car Company has offered to purchase 90,000 batteries from the Electrical Division for $104 per unit. At a normal volume of 250,000 batteries per year, production costs per battery are as follows: $ 404 Direct materials Direct manufacturing labor Variable factory overhead Fixed factory overhead | Total 12 404 $112 The Electrical Division has been selling 250,000 batteries per year to outside buyers at $136 each; capacity is 350,000 batteries per year. The Fabrication Division has been buying batteries from outside sources for $130 each. Required: a. Should the Electrical Division manager accept the offer? Explain. (5 points) b. From the company's perspective, will the internal sales be of any benefit? Explain. (5 points)