transfer pricing

Hi John! Oxco has two divisions, A and B. Division A makes a component for air conditioning units which it can only sell to Division B. It has no other outlet for sales. Current information relating to Division A is as follows: Marginal cost per unit $100 Transfer price of the component $165 Total production and sales of the component each year 2,200 units Specific fixed costs of Division A per year $10,000 Cold Co has offered to sell the component to Division B for $140 per unit. If Division B accepts this offer, Division A will be shut. If Division B accepts Cold Co’s offer, what will be the impact on profits per year for the group as a whole? 1. The answer is Decrease of $78,000. 2. How to obtain the answer?