The sweet section of their candy production is broken down into two independent SBUs, both run as profit centres. Both are free to purchase or sell their products internally or externally. Initial Manufacturing $($IM$)$ currently purchases sugar and flavourings from outside suppliers and produces a base upon which all Happiland$$s sweet candies are based. Final Production $($FP$)$ takes the candy bases and makes a variety of sweet treats from them.

The managers of the two units have been unfriendly with each other for some time. IM$$s manager used to work for the manager of FP$,$ but a breakdown in their working relationship $($despite each of them being good managers in their own right$)$ lead to them each heading their own independent division.

IM has been approached by an outside purchaser and the purchaser has offered to buy $3,000,000$ units per year at a price of $$0\mathrm{.}15$ per unit. Though IM doesn$$t have the capacity currently to take the order, they have threatened to cut production internally to $7,000,000$ units and take the external order if FP doesn$$t up the transfer price to $$0\mathrm{.}15$ per unit. Prab is frustrated with their squabbling and is concerned they are not doing what is in the company$$s best interests. They are currently transferred at $$0\mathrm{.}10$ per unit, though no one can remember how this number was chosen.

Information from each division:

Initial Manufacturing

Current production $9,000,000$ units

Capacity $10,000,000$ units

Outside order volume $3,000,000$ units

External selling price $$0\mathrm{.}15$ per unit

Internal transfer price $$0\mathrm{.}10$ per unit

Variable cost $$0\mathrm{.}03$ per unit

Current fixed costs $($based on $9,000,000$ units$)$ $$450,000$ per year

Final Production

Demand $9,000,000$ units

Selling price $$0\mathrm{.}19$ per unit

Variable costs $($not including transferred$-$in costs$)$ $$0\mathrm{.}02$ per unit

Transferred$-$in costs $$0\mathrm{.}10$ per unit

Fixed costs $$550,000$ per year

Tax rate $30\%($mighet not apply$)$

Requirement Prepare three different transfer prices on a per unit and total basis for Prab to consider.