Question: Based on T_Kong Industries' data in Exercise 24-20, assume that a transfer price of $160 has been established and that 50,000 units of materials are

Based on T_Kong Industries' data in Exercise 24-20, assume that a transfer price of $160 has been established and that 50,000 units of materials are transferred, with no reduction in the Components Division's current sales.

a. How much would T_Kong Industries' total income from operations increase?

b. How much would the Instrument Division's income from operations increase?

c. How much would the Components Division's income from operations increase?

d. If the negotiated price approach is used, what would be the range of acceptable transfer prices and why?

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