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Use the following information for the next FOUR questions: Division A produces a product that...

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Accounting

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Use the following information for the next FOUR questions: Division A produces a product that it sells to outside customers for $84 per unit. Division A has the capacity to produce 30,000 units and is currently producing and selling 24,000 units to outside customers. Variable costs are $51 per unit and fixed costs are $14 per unit. Division B needs 3,000 units of the product that Division A produces to be used as a component part in its finished good. Division B is currently buying the part from an outside supplier for $81 per unit. 1. From Division A's perspective, the: a. maximum transfer price is $66. b. maximum transfer price is $84. c. minimum transfer price is $51. d. minimum transfer price is $84. 2. From Division B's perspective, the: a. maximum transfer price is $81. b. maximum transfer price is $84. c. minimum transfer price is $51. d. minimum transfer price is $66. 3. If a transfer occurs, the company's overall profit will: a. Increase by $90,000. b. Increase by $48,000. c. Decrease by $9,000. d. Decrease by $54,000. 4. Instead assume that Division A is currently selling 28,000 units to outside customers. In this case, what is the minimum transfer price? a. $67.50 b. $81.00 c. $79.67 d. $62.00

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