Question Content Area

The materials used by Hibiscus Company's Division A are currently purchased from an outside supplier at $52 per unit. Division B is able to supply Division A with 18,700 units at a variable cost of $45 per unit. The two divisions have recently negotiated a transfer price of $47 per unit for the 18,700 units.

a. By how much will each division's income increase as a result of this transfer?

Division A	$fill in the blank 1
Division B	$fill in the blank 2

b. What is the total increase in income for Hibiscus Company

$fill in the blank 3