The Michael-Brown Corporation, a manufacturer of tractors and other heavy farm equipment, is organized as a collection of independent profit centers. Each division manager has been delegated full authority on all decisions involving the sale of that division's output both to outsiders and to other divisions of Michael-Brown. Division C has in the past always purchased a particular engine component from Division A. However, when informed that Division A is increasing its selling price of this component to $15,500, Division C's manager decides to purchase the engine component from external suppliers. Division C can purchase the component for $14,500 per unit in the open market. Division A insists that, because of the recent installation of highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its prices (as indicated above). Division A's manager appeals to top management of Michael-Brown for support in the dispute with Division C and supplies the following operating data: A's production capacity for the 1,500 units engine component A's variable cost per unit of the $11,500 engine component A's fixed cost per unit of the engine $4,500 component (These fixed costs are sunk, i.e., cannot be recovered) The remaining questions all pertain to the Michael-Brown Corporation. Question 9: Assume that the manager of Division A has only sold internally to Division C in the past. That is, Division A has no customers external to Michael-Brown. Does the company as a whole benefit if Division C purchases the component from external suppliers for $14,500 per unit? Here, benefit" means: total corporate wide profits increase. Group of answer choices a. Yes O b. No Question 10: What transfer price should be set by Division A if it were to adhere to the general rule of transfer pricing based on the information in question 9? Group of answer choices a. Charge $11,500 per unit up to Division A's capacity b. Charge $15,000 per unit up to Division A's capacity c. Charge $14,500 per unit up to Division A's capacity Question 11: Suppose now, for the first time, the manager of Division A finds an external customer for a modification of the engine component. The modification of the component results in Division A incurring additional variable costs per unit of $6,000 per unit, but if it produces this modification, there are no other companies on earth that can supply this external component to this customer. Also, even if it produces this modified component for the external customer, it can continue to produce the unmodified component for Division C if it has any excess capacity. Modifying the component results in no change in the total capacity of Division A: if x is the number of units sold to the external customer of the modified component and y is the number of units sold to Division C of the unmodified component, Division A still has the production capacity constraint of 1500, i.e., x + y cannot exceed 1500. The contract between Division A and the external customer specifies that the external customer is willing to purchase up to 1200 units of the modified component at a price of $22,000 per component supplied. Taking into account the contract between Division A and the external customer, what is the total (not per unit) transfer price that Division A should charge Division C for the internal production and transfer of 700 of the unmodified components, according to the general rule of transfer pricing. Group of answer choices a. $8,500,250 b. $9,850,000 c. $10,375,500 d. $12,525,750