Transfer Pricing The materials used by the North Division of Horton Company are currently purchased from outside suppliers at $87 per unit. These same materials are produced by Horton's South Division. The South Division can produce the materials needed by the North Division at a variable cost of $48 per unit. The division is currently producing 63,000 units and has capacity of 90,000 units. The two divisions have recently negotiated a transfer price of $73 per unit for 27,000 units. By how much will each division's income increase as a result of this transfer? South Division North Division