The materials used by the Winston-Salem Division of Fox Company are currently purchased from outside...
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The materials used by the Winston-Salem Division of Fox Company are currently purchased from outside suppliers at $86 per unit. These same materials are produced by Fox's Flagstaff Division. The Flagstaff Division can produce the materials needed by the Winston-Salem Division at a variable cost of $36 per unit. The division is currently producing 161,000 units and has capacity of 230,000 units. The two divisions have recently negotiated a transfer price of $55 per unit for 69,000 units. By how much will each division's income increase as a result of this transfer? Winston-Salem Division $ Flagstaff Division $
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