Business, 06.05.2020 05:05 quan91

Division X has asked Division K of the... Division X has asked Division K of the same company to supply it with 5,950 units of part L433 this year to use in one of its products. Division X has received a bid from an outside supplier for the parts at a price of $27.00 per unit. Division K has the capacity to produce 30,500 units of part L433 per year. Division K expects to sell 26,300 units of part L433 to outside customers this year at a price of $32.00 per unit. To fill the order from Division X, Division K would have to cut back its sales to outside customers Division K produces part L433 at a variable cost of $24.00 per unit. The cost of packing and shipping the parts for outside customers is $2.00 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to Division X.

Required:

a. What is the range of transfer prices within which both the Divisions' profits would increase as a result of agreeing to the transfer of 5,950 parts this year from Division X to Division K? (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response) The Transfer price can be greater than$ but less than $
b. Is it in the best interests of the overall company for this transfer to take place? Yes No c. What is the increase in Company's profit for each unit transferred?

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Division X has asked Division K of the... Division X has asked Division K of the same company to sup...

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