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Division A and Division I are divisions within the same company. The manages of both divisis are all had their dhiou's utan sic Assume the
Division A and Division I are divisions within the same company. The manages of both divisis are all had their dhiou's utan sic Assume the following information relative to two divisions Dis A Capacity in unite Selling price per unit to outside customer Variablets per mot Fixed cost per unit (based on capacity) Division Number of units needed annually Purchase price now being paid to an outside supplier 400,000 400,000 500 565 $15 30,000 SHO 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? Activate Windows Go to Settings to activate Windor 4. Assume Division A offers to sell 30,000 units to Division B for $88 and that Division B refuses this price. What will be the loss in potential profits for the company as a whole and for each division? Dress LT-F19 (PC) or ALT+FN+F10 (Mac)
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