Question 4: The upstream division {in short :UPiof the Noble Laggards , Inc. makes L'va pzoducts , A and 5. Currently UP makes 300,300 units of product B, which it sells in the external market at a unit price of S40; and it n akes 100,000 units of product A, shipped internally to the I'm NN division at a transfer price of full cost plus a l % markup. UP incurs S10 unit variable costs {consisting of direct materials and direct labor l for each unit of A or B. The UP division also incurs fixed OH of 314 million, mostly for allocated corporate 56&A and building lease costs . Variable OH is negligible . All OH of the UP division is allocated to products A and B on the basis of their respective variable costs. The TOWN division converts each unit of product Ainto one unit of a final product at variable further -pr0cessing costs of $10. It sells the final product for :60 to a single DZB customer who buys exactly 100,000 units . Hence , the quantity currently transferred from UP to DOWN fully covers DOWN's needs. All division managers are compensated solely on the basis oftheir respective divisional income. Required a. Compute the UP division's income in the status quo setting described above. b. The manager of the UP division considers raising the price for product B in the external market to $45 (from 540). Such a price increase would make the sales quantity drop to 240,000 units of B {from 300,000 units ;. Compute the impact of such a price increase on the shareholder value of Noble Laggards, Inc. c. Will the manager of the UP division carry out the price increase for product B? Com ment on your findings. If you identify a goal conflict between the UP division's management and shareholders , make suggestions how to improve the situation