Alpha and Bets are al visions within the same company. The managers of both livisions are evaluated based on their own division's retum on investment (RON). Assume the following information relative to the two divisions: capacity 3 Alpha Division Capacity in units 51,600 295, 110,00 295,00 Nauber of units now being sold to outside customers 51.ae 295,00 85,00 206,00 Selling price per unit to outside $ 42 $ 61$ 43 Variable costs per unit $ 66 $ 20$ 37 $ 3a Fixed costs per unit (based on $ 26 5 11 5 18$ 3 Beta Division: Nauber of units needed annually 18, 52, Purchase price now being paid to an outside super $ 61 "Before any purchase discount. Managers are free to decide if they will participate in sny internal transfers. All transfer prices are negotiated Required: 1. Refer to case 1 shown above. Alphs Division can avoid $4 per unit in commissions on any les to Bets Division a. What is the lowest acceptable transfer price from the perspective of the Alpha Division: b. What is the highest scceptable transfer price from the perspective of the Bets Division? c. What is the range of scceptable transfer prices of any between the tive division? Will the managers probably agree to transfer? 2 Refer to care 2 shown above. A study indicates that Alphs Dision can evold $5 per unit in shipping costs on any sales to Bets Division 6. What is the lowest acceptable transfer price from the perspective of the Alpha Division b. What is the highest scceptable transfer price from the perspective of the Beta Division c. What is the range of scceptable transfer prices any between the tive divisions: Would you expect sny disagreement between the tive divisional managers over what the exact transfer price should be d. Assume Alpha Division offers to sell 74.000 units to Beta Division for $39 per unit and that Bets Division refuses this price. What wil be the loss in potential profits for the company 55 whole? 3. Refer to case 3 shown above. Assume that Bets Division is now receiving an 6% price discount from the outside suppiller .. What is the lowest acceptable transfer price from the perspective of the Alpha Division 6. What is the highest scceptable transfer price from the perspective of the Beta Division? c. What is the range of scceptable transfer prices of any between the tive divisions? Will the managers probably agree to transfer d. Assume Bets Division offers to purchase 19,000 units from Alpha Dision st $52.34 per unit IF Alpha Division accepts this price, would you expects Rol to incresse, decresce, or remain unchanged 4. Refer to case 4 shown above. Assume that Bets Division wants Alpha Division to provide it with 62.000 units of different product from the one Alpha Division is producing now. The new product would require $25 per unit in variable costs and would require that Aloha Division cut back production of its present product by 31,000 units Sinually. What is the lowest acceptable transfer price from Alpha Division's perspective Complete this question by entering your answers in the tabs below. R1A L 10 Reg 2 to 20 R 34 to 3D R44 1. Refer to case 1 shown above. Alpha Division can avoid $4 per unit in commissions on any sales to Beta Division a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? 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 price $ 97 Highest acceptable transfer price 94 Identify the range of scooptable transfer prices (f anyt There is not a range of acceptable transfer prices Othere is a range of acceptable transfer prices as shown below. Transfer price 5 Wil the managers agree to the trade? Yes TONO Roq 1A to 10 Raq 24 to 2D > 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 the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? 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 74,000 units to Beta Division for $39 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any): There is not a range of acceptable transfer prices. There is a range of acceptable transfer prices as shown below. Transfer price Will the managers agree to the trade? OYes ON Loss in potential profits for the company 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 6% price discount from the outside supplier. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? d. Assume Beta Division offers to purchase 18,000 units from Alpha Division at $52.34 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? (Round your final answers to 2 decimal places.) Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any): There is not a range of acceptable transfer prices. There is a range of acceptable transfer prices as shown below: Transfer price Will the managers agree to the trade? OYes ONO Division A's ROI should O Increase Decrease Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 62,000 units of a different product from the one Alpha Division is producing now. The new product would require $26 per unit in variable costs and would require that Alpha Division cut back production of its present product by 31,000 units annually. What is the lowest acceptable transfer price from Alpha Division's perspective? Show less Lowest acceptable transfer price