Using standard costs to set the tra les If Overall Corporation sets the transfer price at cost, Selling Division will be encouraged to control costs. Check My Wor Consider what happens to the net income of a company that sells its product exactly at the cost to produce Also consider what happens to the net income of a buyer if purchases at the super conto produce APPLY THE CONCEPTS: Determining benefits of negotiated transfer price Assume that Selling Division and Buying Division are both owned by Overall Corporation Selling Division sells a product that is used by Buying Division and outside customers. Seling Division has 25,000 units of excess capacity. Selling Division currently sells the product for 20 per unit and Buying Division currently buys 25.000 units of the product from an outside source for $20 per unit. Variable costs of the product are $4, of which $1 is the cost of selling the product to an outside customer. Using Sering price less avoidable costs as the minimum price, in the following formula for the desired transfer prices transfer price Email Instructor Save and Exit Submit Assignment for Grading Carnet Show Count 9002220CA OOO20