QUESTION 111: Division X has asked Division K of the same company to supply it with 5,000 units of part L433 this year to use in one of its products. Division X has received a bid from an outside supplier for the parts at a price of S26.00 per unit. Division K has the capacity to produce 30,000 units of part L433 per year. Division K expects tosell 26,000 units of part L433 to outside customers this year at a price of S30.00 per unit. To fill the order from Division X, Division K would have to cut back its sales to outside customers. Division K produces part L433 at a variable cost of $21.00 per unit. The cost of packing and shipping the parts for outside customers is $2.00 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division X. Required a. What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 5,000 parts this year from Division X to Division K? b. Is it in the best interests of the overall company for this transfer to take place? Explain