The materials used by the Winston-Salem Division of Fox Company are currently purchased from outside suppliers at $107 per unit. These same materials are produced by Fox's Flagstaff Division. The Flagstaff Division can produce the materials needed by the Winston-Salem Division at a variable cost of $63 per unit. The division is currently producing 140,000 units and has capacity of 200,000 units. The two divisions have recently negotiated a transfer price of $91 per unit for 60,000 units.
By how much will each division's income increase as a result of this transfer?
Winston-Salem Division...................$
Flagstaff Division...........................$