Q4

= Sunland International Corporation has two divisions Division A and Division B. Division A produces a motor that sells for $98 per unit with the following costs based on its capacity of 188,000 units: $30 Direct materials Direct labour 25 Variable overhead 11 Fixed overhead 5 Division Als operating at 70% of normal capacity and Division B is purchasing 23.500 units of the same component from an outside supplier for $94 per unit Calculate the benefit, if any, to Division A in selling to Division B the 23,500 units at the outside supplier's price. Benefit $ Calculate the lowest price Division A would be willing to accept Lowest price $ if Division A is operating at full capacity, what would be the lowest transfer price that it is willing to accept? Lowest transfer price