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39. $23

40. ($5,000)

Use the following information to answer questions 39 through 40. Nelcro Company has two divisions: Electrical and Motors. It evaluates its division managers on the basis of divisional profit. The Electrical Division produces a high-quality transformer. Sales and cost data on the transformer follow. Selling price per unit on the outside market.... Variable cost per unit Fixed cost per unit (based on capacity Capacity in units.75,000 $23 $12 The Motor Division currently purchases 5,000 transformers each year from an outside vendor at a cost of S44 each. It would like to begin purchasing the transformers from Electrical Division. 39. Assume Electrical Division sells 50,000 units a year to outside buyers. Compute the lowest price at which it would be willing to transfer the transformers to Motor Division. 40. Assume that Electrical Division currently sells all the transformers it can produce to outside buyers. Compute the amount by which corporate profit would change if it transferred 5,000 of these transformers to Motor Division at a price of S42 each instead of selling them externally