december 2012 q no 5 wash co

Here the examiner says "The retail division’s manager is convinced that, if he could obtain R at a lower cost and therefore reduce the external selling price from $260 to $230 per unit, he could significantly increase sales of R, which would be beneficial to both divisions" my question is Part c where u are asked to calculate profiys of bth divisions using transfer price of ABC method. Under abc method product R is costing less ie 187$. so i assume that the prodcution manger will reduce the selling price to 230p.u. however he has still used 260. can u tell me y he would use the old transfer price. the wordings are quite confusing coz yu tend to think the selling price will now change.