Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's retum on investment (RO). Assume the following information relative to the two divisions: "Before any purchase discount. Required: 1. Refer to case 1 shown obove. Alpha Division can ovoid $2 per unt in commissions on any soles to Beta Division. a. What is Alpha Division's lowest acceptable transter price? b. What is Beta Divisions highest acceptable transfer price? c. What is the range of acceptoble tanasfer prices of any) between the two divisions? Wil the marnogers 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 an any sales to Beta Division. a. What is Alpha Dision's lowest acceptable transter price? b. What is Beta Divisions nighest acceptable transter price? 6. What is the range of acceptable transter prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transter price should be? d. Assume Alpha Division otfers to sell 40000 units to Beta Division for $108 per unut and that Beta Division refises this price. What Wili be the loss in potentiar ptofits for the company as a whole? 3. Refer to case 3 shown above, Assume that Beta Division is now receiving an 8 \% price discount fromt the outside suppliec. What is Alpha Disions lowest occeptable transfer price? b. What is Beta Divisionts highest acceptable trantsfer price? C. What is the range of acceptable tranifer prices af any) between the two divisigns? Wil the managers probably agree to a transfer? d. Assume Beta Dision offers to purehase 30,000 units from Apha Divsion an \$10 per unt, ir Alpha Dwision acesepts this price, would. you expect its Roi to increase decrease oritemain unchanged? 4. Refer to case 4 shown above Assume that Beta Diyison wants Alpha Divisign to provicie fif with 122,000 untio of a difterent product. from the one Alpha. Division is probocing now. The newprodict wodld require S41 per unitin vanabie costs and would require that price? Complete this question by entering your answers in the tabs betow. 1. Refer to cane 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 probabiy - pree to a transfer? Cownlete this question by enbering your answers in the tabs below. 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 Soisions? Would you expect any disagreement. between the two divisional managers over what the exact transfer price should bu d. Assume Alpha Division offers to sell 40,000 units to Beta Division for $108 per unit and that Beta Division reluses this price. What will be the loss in potential profits for the company as a whole? Complos. Whin quastion by entering your ansviers in the tabs below. 3. Refer to cace 3 shown above. Assume that Beta Division is now receiving an 8% price discount from the outside supplier. 3. 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 transier prices (if any) between the two divisicoc? Will the managers probably agree to a d. Assume Beta Division offers to purchase 30,000 units from Alpha Division at 560 per unit if Alpha Division accepts this transfer? price, would you expect its ROt to increase, decrease, or remain unchanged? Complete this question by entering your answers in the fabs below. 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 122,000 units of a different product from the one Alpha Division is producing now. The new product would require $41 per unit in variable costs and would require that Alpha Division cut back production of its present product by 45,750 units annually. What is Alpha Division's lowest acceptable transfer price