Decision on Transfer Pricing Materials used by the Instrument Division of Ziegler Inc. are currently purchased from outside suppliers at a cost of $385 per unit. However, the same materials are available from the Components Division. The Components Division has unused capacity and can produce the materials needed by the Instrument Division at a variable cost of $320 per unit.

a. If a transfer price of $350 per unit is established and 21,000 units of materials are transferred, with no reduction in the Components Division's current sales, how much would Ziegler Inc.’s total operating income increase?
$fill in the blank 1
630,000
b. How much would the Instrument Division’s operating income increase?
$fill in the blank 2
1,365,000
c. How much would the Components Division's operating income increase?
$fill in the blank 3