Division A and Division B are divisions within the same company. The managers of both divisions are evaluated based on their division's return on investment (ROI). Assume the following information relative to two divisions: Division A Capacity in units Numbers of units now being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed cost per unit (based on capacity) Division B Number of units needed annually Purchase price now being paid to an outside supplier A study indicates that Division A can avoid $5 per unit in shipping costs on any sales to Division B. Required: Compute the following 1. Calculate the lowest acceptable transfer price for the seller (Division A)? 2. Calculate the highest acceptable transfer price for the buyer (Division B)? 400,000 400,000 $90 $65 $15 For the 30,000 $89 3. Calculate the range of acceptable transfer prices between the two divisions? 4. Assume Division A offers to sell 30,000 units to Division B for $88 and that Division B refuses this price. What will be the loss in potential profits for the company as a whole and for each division?