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

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Set 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 her to outside customers or to Divon Y of the same company for use in its production process. The managers of the divisions are evaluated Dated on the divisional profits CARE Division Capacity in units Number of units being sold to outside customers Selling price per unit to outside customer Variable conta per unit Pixed costs per unit (based on capacity) Division Y Number of units needed for production Purchase price per unit now being paid to an outside supplier 99,000 100,000 99.000 49,000 5 59 26 S 285 18 IOS 6 19.000 19.000 $ 535 36 Required: 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 divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place? Complete this question by entering your answers in the tabs below

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