Division B has asked Division A of the same company to supply it with 6,000 units of part L763 this year to use inone of its products. Division B has received a bid from an outside supplier for the parts at a price of$17.00 per unit. Division A has the capacity to produce 30,000 units of part L763 per year. Division A expects to sell 27,000 units of part L763 to outside customers this year at a price of $18.00 per unit. To fill the order from Division B, Division A would have to cut back its sales to outside customers. Division A produces part L763 ata variable cost of $9.00 per unit. The cost of packing and shipping the parts for outside customers is $1.00 per unit. These packing and shipping costs would not have to be incurred on sales of the parts to

Division B.

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 6,000 parts this year from

Division B to Division A?

b. Is it in the best interests of the overall company for this transfer to take place? Explain.