$15-24.$ Basic Transfer Pricing Issues

$($ LO $15-1)$

Hamlet Industries is organized into two divisions, Fabrication and Finishing. Both divisions are considered to be profit centers, and the two division managers are evaluated in large part on divisional income. The company makes a single product. It is manufactured in Fabrication and then packaged and sold in Distribution. There is no intermediate market for the product.

The monthly income statements, in thousands of dollars, for the two divisions follow. Production and sales amounted to $32,000$ units.

$\backslash$table$[[,$Fabrication,Distribution$],[,($$$000),($$$000)$