Office Systems Corporation
Office Systems Corporation Manufactures and Sells Various

Office Systems Corporation
Office Systems Corporation manufactures and sells various high-tech office automation products.Two divisions of Office Systems Corporation are the Computer Chip Division and the Computer Division.The Computer Chip Division manufactures one product,a "super chip," that can be used by both the Computer Division and other external customers.The following information is available on this month's operations in the Computer Chip Division:
$\begin{array}{l}\begin{array}{l}\text { Selling price per chip }&\$50 & \\\text { Variable costs per chip }&\$20 \\\text { Fixed production costs }&\$ 60,000 \\\text { Fixed SG\&A costs }&\$ 90,000 \\\text { Monthly capacity }&10,000 & \text { chip }\\\text { External sales } &6,000 & \text { chip }\\\text { Internal sales }&0 & \text { chip }\end{array}\end{array}$

Presently,the Computer Division purchases no chips from the Computer Chips Division,but instead pays $45 to an external supplier for the 4,000 chips it needs each month.
Refer to Office Systems Corporation.Two possible transfer prices (for 4,000 units) are under consideration by the two divisions: $35 and $40.Corporate profits would be ____ if $35 is selected as the transfer price rather than $40.

A) $20,000 larger
B) $40,000 larger
C) $20,000 smaller
D) the same