The following information applies to the questions displayed below. In each of the cases below, assume that 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) 108,000 108,000 $59 $24 %7 92,000 67,000 $33 $17 $5 Division Y Number of units needed for production Purchase price per unit now being paid to an outside supplier 25,000 25,000 $55 $34 16 value: 5.00 points Required 1-a. Refer to the data in case A above. Assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales Transfer price 2 2-a. Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales. Determine the transfer price of the selling division Transfer price 2 2-b. If the managers are free to negotiate and make decisions on their own, will a transfer take place? O No O Yes 2-c. What is the range of transfer price the managers of both divisions should agree? he lowest transfer price would be and the highest transfer price would be