Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their return on

investment $($ROI$).$ Assume the following information for the two divisions:

$*$Before any purchase discount.

Required:

Refer to case $1$ shown above. Alpha Division can avoid $$2$ per unit in commissions 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? Will the managers agree to a transfer?

Refer to case $2$ shown above. A study indicates 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 $33,000$ units to Beta Division for $$94$ per unit and Beta Division refuses this price. What will

be the company's loss in potential profits?

Refer to case $3$ shown above. Assume 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 any$)$ between the two divisions? Will the managers agree to a transfer?

d$.$ Assume Beta Division offers to purchase $23,000$ units from Alpha Division at $$75$ per unit. If Alpha Division accepts this price,

would you expect its ROI to increase, decrease, or remain unchanged?

Refer to case $4$ shown above. Assume Beta Division wants Alpha Division to provide it with $120,600$ units of a different product from

the one Alpha Division is producing now. The new product would require $$27$ per unit in variable costs and would require Alpha

Division to cut back production of its present product by $45,225$ units annually. What is Alpha Division's lowest acceptable transfer

price?