alpha and beta are divisions within the same company.

Alpha and Beta are divisions within the same comparty. The managers of both divisions are evalueted besed on their own division's return on investment (ROA) Assume the following linformation relative to the two divisiorr: Required: 1. Refer to case 1 shown above. Alpha Division can avoid 52 per unit in commissions on amy sales to Beta Division. a. What is Alpha Division's lowest acceptabie transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (f ary) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid \$5 per unit in shipping costs on any sales to Beta Division. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 30,000 units to Beta Division for S88 per unit and that Beta Division refuses this price. What will be the foss in potential profits for the company as a whole? 3. Refer to case 3 shown above. Assume that Beta Division is now recelving an 8 fi ptice oiscount from the outside suppliet. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Wiil the managers probably agree to a transfer? d. Assume Beta Division offers to purchase 20.000 units from Alpha Division at $60 per unit. If Alpha Dlvision accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? 4. Refer to case 4 shown above. Assume that Beta Dwision wants Afphs Division to provide it with 120.000 unis of a different product from the one Alpha. Division is producing now. The new product would require 521 per unit in variable costs and would require that Alpha Dlvision cut back production of its present product by 45,000 units annually. What is Aipha Division's lowest acceptable transfer price? Complete this question by entering your answers in the tabs below. 1. Refer to case 1 shown above. Alpha Division can avoid $2 per unit in comprissions on any rales to Beta Division, a. What is Alpha Division's lowest acceptable transfer price? b. What is Eata Divition's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the tilo divisions? Will the managers probably agree to a transfer? Complete this question thy entering your answrers in the tabs below. 1. Fiefer to case 1 shown above. Apha Division can avoid $2 per unit in cornmissions on any sales to Bela Division. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $5 per unit in shipping costs on any sales to Beta Division. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 30,000 units to Beta Division for $88 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? Complete this question ty entering your amsovers in the tabs below. -3. Refer to mase 3 shown above. Assume that Bleta Division is rvov receiving an 8% price discount from the outside supplier. a. What is Apha Division's lowest acceptable toansfer price? b. What is Bela Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (of aryy) between the two divisions? Will the managers probably agree to an transier? d. Assume Beta Division offers to purchase 20,000 units from Alpha Division at. $60 per unit. If Alpha Division accepts this. price, would you expect its ROf to increase, decrease, of refrain unchanged? Complete this question by entering your answers in the tabs below. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 120,000 units of a different product from the one Alpha Division is producing now. The new product would require $21 per unit in variable costs and would require that Alpha Division cut back production of its present product by 45,000 units annually. What is Alpha Division's lowest acceptable transfer price