Question 29 Arian International Corporation has two divisions, Division A and Division B. Division A produces a motor that sells for $90 per unit, with the following costs based on its capacity of 184,000 units: Direct materials Direct labour Variable overhead Fixed overhead $29 25 10 5 Division A is operating at 70% of normal capacity and Division B is purchasing 29,000 units of the same component from an outside supplier for $86 per unit. Calculate the benefit, if any, to Division A in selling to Division B the 29,000 units at the outside supplier's price. Benefits Calculate the lowest price Division A would be willing to accept. Lowest prices If Division A is operating at full capacity, what would be the lowest transfer price that it is willing to accept? Lowest transfer prices