Transfer Pricing The materials used by the Multinomah Division of Isbister Company are currently purchased from outside

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Transfer Pricing The Materials Used By The Multinomah Division Of Isbister Company Are Currently Purchased From Outside 1 (58.63 KiB) Viewed 8 times

Transfer Pricing The materials used by the Multinomah Division of Isbister Company are currently purchased from outside suppliers at $64 per unit. These same materials are produced by the Pembroke Division. The Pembroke Division can produce the materials needed by the Multinomah Division at a variable cost of $26 per unit. The division is currently producing 140,000 units and has capacity of 200,000 units. The two divisions have recently negotiated a transfer price of $38 per unit for 60,000 units. By how much will each division's income increase as a result of this transfer? Pembroke Division Multinomah Division $