Required information Exercise 11-13 (Algo) Transfer Pricing Situations (LO11-3] The following information applies to the questions displayod below) In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits Case Division : Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Feed costs per unit (based on capacity) Division : Number of units needed for production Purchase price per unit now being paid to an outside supplier 101,000 101,000 $ 60 5.29 $6 100,000 84,000 $ 29 $10 55 16,800 15,000 5.51 5.26 Exercise 11-13 (Algo) Part 1 sale Required: 1. Refer to the data in case A above. Assume in this case that $4 per unit in variable selling costs can be avoided on intracompany What is the lowest acceptable transfer price from the perspective of the selling division? b What is the highest acceptable transfer price from the perspective of the buying division? What is the range of acceptable transfer prices of any) between the two divisions in the managers are free to negotiate and make decisions on their own will transfer probably take place