Questions 8 and 9 are based on the following information: Division A makes a widget with the following characteristics: 15,000 units Production capacity in units Selling price to outside customers $30 per unit Variable cost per unit Total fixed costs $20 $60,000 Division B, another division of the same company, makes a gizmo, of which a widget is an important component. Division B has a capacity of 5,000 units and would like to purchase 5,000 units of the widget each period from Division A. Division B is now purchasing the widget from an outside supplier at a price of $28 each. Assume that the division managers are free to negotiate and make decisions on their own. The managers of the divisions are evaluated on their division's profits. Question 8 Suppose that Division A is operating at full capacity and can sell all of its output to outside customers at its usual selling price. Is it likely that the divisions will agree to transfer? Why or why not? Edit View Insert Format Tools Table : 12pt v Paragraph B IV A 22v Question 9 Now, Assume that Division A has demand for 10,000 widgets from outside customers at its usual selling price. Division B can sell 5,000 units of its gizmo for $56. In addition to the cost of the widget, Division B also has $12 in variable cost per unit The outside supplier that Division B has been buying the widget from has raised the price to $31. If Division A and Division B were to negotiate a transfer price, what is the range of prices that A and B could negotiate between? Edit View Insert Format Tools Table : 12pt Paragraph BIU A 2 12v