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Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment [ROI].

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Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment [ROI]. Assume the following information relative to the two divisions: Case '1 2 3 4 Alpha Division: Capacity in units 84,666 464,666 154,666 364,666 Number of units now being sold to outside customers 84,666 464,666 164,666 364,666 Selling price per unit to outside customers $ 38 $ 98 $ 95 $ 58 Variable costs per unit $ 26 $ ?3 $ 66 $ 34 Fixed costs per unit (based on capacity) $ 6 $ 15 $ 26 $ 9 Beta Division: Number of units needed annually 9,666 34,666 24,666 126,366 Purchase price now being paid to an outside supplier $ 35 $ 9? $ 95* \"Before any purchase discount. Complete this question by entering your answers in the tabs below. Reg 1A to IE Reg 2A to 2D Reg 3A to 3D Reg 4 1. Refer to case 1 shown above. Alpha Division can avoid $2 per unit in commissions on any sales to Beta Division. a. IWhat 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? Show less'. Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer pn'ee Highest acceptable transfer price Range of acceptable transfer prices Will the managers agree to the trade? Req ZAto 2D 3* Reg 1A to IC Fteq 2A to 2D Reg 3A to 30 Reg 4 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 Eteta 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? cl. Assume Alpha Division offers to sell 34,000 units to Beta Division for 596 per unit and that Beta Division refuses this price. What will be the loss in potential prots for the company as a whole? Show less A Identify the lowest and highest acceptable transfer prices: Winnersmu Loss in potential prots for the company Req 1A to It: Reg 2A to 2D Reg 3A to 3D Reg 4 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 8% price discount from the outside supplier. 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 anv} between the two divisions? Will the managers probably agree to a transfer? d. Assume Beta Division offers to purchase 24,000 units from alpha Division at $60 per unit. If Alpha Division accepts this price, would you expect its R01 to increase, decrease, or remain unchanged? Show less; Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer pn'ce Highest acceptable transfer price Range of acceptable transfer prices Will the managers agree to the trade? Division A's ROI should

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