The materials used by the Vancouver Division of Roberts Company arc currently purchased from outside suppliers at $45 per unit. These same materials are produced by Roberts’ Tucson Division. The Tucson Division can produce the materials needed by the Vancouver Division at a variable cost of $30 per unit. The division is currently producing
100,000 units and has capacity of 1.30,000 Units. The two divisions have recently negotiated a transfer price of $38 per unit for 25,000 units. By how much will each division’s income increase as a result of this transfer?