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Hrubec Products, Inc. operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with

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Hrubec Products, Inc. operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow Selling price Expenses Fbred based on a capacity of 97.000 ton per year) Net operating income Hrubec Products has just acquired a small company that manufactures paper cartons. This company will be treated as a division of Hubec with uprot responsibility. The newly formed Carton Division is currently purchasing 30.000 tons of purp per year from a supplier at a cost of $24 per lon, sa 10purchase discount Hube's president is anxious for the Carton Division to begin purchasing its pulp from the Pup Dinif an acceptable transfer price can be worked out Required: For (1) and (2) below.assume the Pulp Division can seas of its pup to outside customers for $24 perton 1. What is the lowest acceptable transfer price from the perspective of the Pulp Division? What is the highest scceptable Master pece from the perspective of the Carton Division What the range of acceptable transfer prices of any between the two divisions? Are the managers of the Canon and Pup sions to voluntarily agree to a transfer price for 30 000 tons of pup next year 2 the Pulp Dision me the price that the carton Division is currently paying to its supplier and sens 30 000 tons of up to the carton on each year will be the effect on the profits of the Pulp Division the carton Division and the company as a whole For (3)-(6) below assume that the Pub Division is currently selling only 500 tons of pupach year to our customers at the stated 24 price 3. What is the lowest acceptable transfer p rom p tive of the Pub D ion? What is the transfer price from the perspective of the Carton Division? What is the range of acceptable transfer prices of between the two sons Are the managers of carton and Pul voluntary gree to transfer pnce for 30.000 tons of up next year - Suppose the carton Divons outside spalle droom is of the scheduscount) t o Southe upon meet the price? - if the Phulp Division does not meet the 520 pnce What will be there on the profits of the commons Who 5 Reteto (above if the P D S on ises to reth 50 price who can be required to purcharom the PuOSonata higher price for the good of the company as a 6. Refer to (4) above Assume that due to exible management poses the Carton Division is required to purchase 30,000 tons of pulo each year to the Pup Division at 524 perton What will be the effect on the pronts of the company as a whole Complete this question by entering your answers in the tabs below

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