Required information The following information applies to the questions displayed below! In each of the...

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Accounting

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Required information The following information applies to the questions displayed below! In each of the cases below, assume Division X has a product that can be sold other to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits Case A Division Capacity in unita Number of unite being sold to outside customers Selling price per unit to outside customers Variable coats per unit Fixed costa per unit (based on capacity) Division Yi Number of units needed for production Purchase price per unit now being paid to an outside supplier 100,000 108,000 $ 57 $ 29 5.7 98,000 79.000 $ 27 $ 16 54 19.000 19.000 $ 50 $ 32 Required: 1. Refer to the data in case A above. Assume in this case that $2 per unit in variable selling costs can be avoided on intracompany sales a. What is the lowest acceptable transfer price from the perspective of the selling division? b. What is the highest acceptable transfer price from the perspective of the buying division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place

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