QUESTION 1 Transfer Pricing Kitchenade Corporation's Gauge Division manufactures and sells product no. 24, which is used in refrigeration systems. Per-unit variable manufacturing and selling costs amount to $23 and $7, respectively. The Division can sell this item to external domestic customers for $40 or, alternatively, transfer the product to the company's Refrigeration Division. Refrigeration is currently purchasing a similar unit from Taiwan for $36. Assume use of the general transfer-pricing rule. Required: A. What is the most that the Refrigeration Division would be willing to pay the Gauge Division for one unit? B If Gauge had excess capacity, what transfer price would the Division's management set? If Gauge had no excess capacity, what transfer price would the Division's management set? C D. Repeat part "C" assuming that Gauge was able to reduce the variable cost of internal transfers by $5 per unit