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Required information (The following information applies to the questions displayed below.) In each of the cases below, assume Division X has a product that can

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Required information (The following information applies to the questions displayed 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 X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) er unit (based on capacity) Division Y: Number of units needed for production Purchase price per unit now being paid to an outside supplier 110,000 96,000 110,000 79,000 55 $ 30 25 $ 11 9 s 6 $ 17,000 17,000 50 $ 22 2. Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales. a. 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? c. What is the range of acceptable transfer prices (if any) between the two division free to negotiate and make decisions on their own, will a transfer probably take place

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