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Transfer Pricing The materials used by the North Division of Zhang Company are currently purchased from outside suppliers at $109 per unit. These same materials
Transfer Pricing The materials used by the North Division of Zhang Company are currently purchased from outside suppliers at $109 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 $56 per unit. The division is currently producing 126,000 units and has capacity of 180,000 units. The two divisions have recently negotiated a transfer price of $79 per unit for 54,000 unts, By how much will each division's income increase as a result of this transfer? a South Division North Division
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