Case A B Division X: Capacity in units Number of units being sold to outside customers...

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Case A B Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers 100,000 101,000 100,000 83,000 $ 54 $ 31 Variable costs per unit $ 26 $ 14 Fixed costs per unit (based on capacity) $ 8 $ 5 Division Y: Number of units needed for production 18,000 18,000 Purchase price per unit now being paid to an outside supplier $ 50 $ 28 Required: 1. Refer to the data in case A above. Assume in this case $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? Case A B Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers 100,000 101,000 100,000 83,000 $ 54 $ 31 Variable costs per unit $ 26 $ 14 Fixed costs per unit (based on capacity) $ 8 $ 5 Division Y: Number of units needed for production 18,000 18,000 Purchase price per unit now being paid to an outside supplier $ 50 $ 28 Required: 1. Refer to the data in case A above. Assume in this case $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?