Fle Edit View History Bookmarks Window Help 0 Chapter 1A Chapter 11A 6 Help Save&Esit Submit Check my Exercise 11A-1 Transfer Pricing Basics [L011-5 Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker foilow s 14 Pixed coats per unit (based en eapaosty Capacity in units 64,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 11,000 speakers per year It has received a quote of $36 per spesker trom another manufacturer Sako Compary evaluates division Required 1 Assume the Audio Division is now selling only 53.000 speakers per year to outside customers a. From the standpoint of the Audio Division, whart is the lowest acceptable transfer price for speakers sold to the Hi-F b. From the standpoint of the H-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c What is the range of acceptable transfer prices of any) between the two divisions? If left free to negotiate without interference, wouild you expect the division managers to voluntarily agree to the transfer of t000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? 2 Assume the Audio Division is selling all of the speakers it can produce to outside customers ?From the standpoint of the Audio Dwion, what is the lowest acceptable trans-price fo spears sold to the itF of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the H-F b From the standpoint Audio Division? 7 8 9 3