4G 11:24 Vo)) LTE 67 K Assignment on... o QUESTION 2 Ride Sdn Bhd (RSB) is operating with three departments, which are Alpha, Betta, and Gamma. The managers of each department has their own authority to decide on whether or not to sell outside the company, or transfer among themselves at a transfer price determined also by themselves. There is an available intermediate market for all departments to purchase their manufacturing needs or to sell their products. Each manager attempts to maximize their contribution margin at the current level of operating assets for the departments. Currently, the manager of Betta is considering the following two offers. Betta are now operating at maximum capacity and they can only accept either offer, but not both. 1. Gamma is in need of 1,500 units of products A that can be supplied by Betta. To manufacture product A, Betta would purchase the components from Alpha at a transfer price of RM600 per unit. Alpha's variable cost for this component is RM300 per unit. Betta will further process this component at a variable cost of RM500 per unit. If Gamma cannot obtain product A from Betta, it will purchase it from outside supplier which has offered to supply the same product A to Gamma at a price of RM1,500 per unit. The outside supplier would also purchase the components needed to produce product A required by Gamma from Alpha at a price of RM300 for each product. Alpha's variable cost for this component is RM200 per unit. 2. One outside company, Sinar Sdn Bhd (SSB) wants to place an order with Betta for 1,750 units of product A at price of RM 1,250 per unit. Betta would again purchase the components from Alpha at a transfer price of RM500 per unit. Alpha's variable cost for this component is RM250 per unit. Betta will further process this component at a variable cost of RM400 per unit. REQUIRED: (a) If the manager of Betta wants to maximize the Betta's short run contribution margin, decide whether Betta should sell the products to Gamma at the prevailing market price or accept the SSB offer. Justify your decision by show detail calculations to support your decision. (b) Independent from (a) above, assume that Betta decides to accept the SSB offer. Calculate the contribution margin for RSB. (c) The evaluation done by Betta on the two offers shows the importance of goal congruence. (i) Explain the concept of goal congruence. (ii) Explain TWO (2) possible reasons why it is important for RSB success. = = E