Transfer Pricing. Division A of Daku Corporation likes to purchase product ACE-23 from Division B of the corporation. Division A is currently purchasing 20,000 units of ACE-23 from an outside at a unit cost of P50, less a 5% quantity discount. Other relevant information are provided below:

Unit sales price on the intermediate market. P50

Unit variable cost. 24

Fixed costs per unit (based on capacity). 12

Normal capacity. 70,000

Required: Suppose Division A can purchase the 20,000 material ACE-23 from a new supplier for P44, net of discount, what would be your recommendation to Division A, buy from Division B or from a new supplier, and at what price. (In your recommendation, the company's overall should be considered)

1. Assuming, Division B has excess capacity.

2. Assuming, Division B has no excess capacity.