Question 2 (15 marks) A company has two divisions (Division A and Division B). Division A sells 40% of its output to Division B with the remaining 60% being sold to external customers. Division B sells to external customers only. Sales to external customers are: Division A $120,000 Division B $364,000 Group $484,000 Costs incurred (excluding transfers to Division B from Division A) are: Division A $170,000 Division B $254,000 Group $424,000 The total capital employed of the Group is $480,000. The cost of capital is 10% per annum. Required: A Calculate the profit of Division A, Division B and the Group for each of the following situations: (8 marks) (i) If the transfer price between the divisions is set at full cost. (7 marks) (ii) If the transfer price between the divisions is set at market price. (Sales to external customers should be assumed to represent the market price). Total 15 marks