QUESTION 4 Sheryl Sandberg runs SheSand, a decentralized firm that produces tag sensors that are radio frequency based (and called RFID tags). Her company has two units. The Melting unit prepares the material through a delicate design and heat process. The manager of the Melting unit is regarded as a profit centre for performance evaluation purposes at SheSand. The Refining unit completes the production process started by the Melting unit producing finished RFID tag sensors. The Refining unit manager is evaluated on the profits which the unit generates and the return on investment it yields at the end of each year. At the beginning of 2019, neither unit has any stock. During the year, the Melting unit prepared 900,000 units of melted semi-finished RFID tags that are ready for refining at a cost of $900,000. All this production was transferred to the Refining unit, where additional operating costs of $1.40 per unit were incurred. The 900,000 finished RFID tags were sold for $2,700,000. REQUIRED: (a) Calculate the operating income for each unit if the transfer price from Melting unit to the Refining unit is $1.50 per unit. [3 marks] (b) Determine the operating income for each unit if the transfer price had been $1 per unit. [3 marks] (c) Since the Melting unit sells all of its output internally to the Refining unit, would the manager of the Melting unit be concerned at what price the transfers occur? Explain fully. [3 marks] (d) Do you think Sheryl should consider making the Melting unit a different type of responsibility centre? What about the Refining unit? Explain fully. [3 marks]