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Division A and Division B are divisions within the same company The managers of both divisions we evaluated based on de following information relative to
Division A and Division B are divisions within the same company The managers of both divisions we evaluated based on de following information relative to two divisions t Division A Capacity in units Numbers of units now being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed cost per unit (based on capacity) Division B 400,000 400,000 590 $65 $15. 30,000 $89 Number of units needed annually Purchase price now being paid to an outsade supplies A study indicates that Division A can avoid $5 per unit in shipping costs on any sales to Division B. Required: Compute the following 1. Calculate the lowest acceptable transfer price for the seller (Division A)? 2. Calculate the highest acceptable transfer price for the buyer (Division By 3. Calculate the range of acceptable transfer prices between the two divisions? 4. Assume Division A offers to sell 30,000 units to Division B for $88 and that Division B refuses thus price. What will be the lom in penal profim fox the cya whee and for each division? ihar, press ALT+F10 (PC) or ALT+FN+F10 (Mac) Arial 10pt MO r "T = A T X 95 PHRO
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