1. Company: Alpha Electronics Ltd.

Scenario: Transfer Pricing Decision

Division Details:

• Division A (Selling Division):
  • Variable Costs: $200,000
  • Fixed Costs: $100,000
  • Production Capacity: 10,000 units

• Division B (Buying Division):
  • Variable Costs: $150,000
  • Fixed Costs: $80,000
  • Demand: 8,000 units

Requirements:

• Determine the transfer price per unit for Division B to acquire products from Division A using the negotiated pricing method. Present a table showing calculations and strategic considerations.