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Transfer Pricing The materials used by the North Division of Zhang Company are currently purchased from outside suppliers at $44 per unit. These same
Transfer Pricing The materials used by the North Division of Zhang Company are currently purchased from outside suppliers at $44 per unit. These same materials are produced by Zhang's South Division. The South Division can produce the materials needed by the North Division at a variable cost of $22 per unit. The division is currently producing 147,000 units and has capacity of 210,000 units. The two divisions have recently negotiated a transfer price of $33 per unit for 63,000 units. By how much will each division's income increase as a result of this transfer? South Division North Division
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