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

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Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods, Revenue and costs assoclated with a ton of pulp follow: Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit centec. The manager of the Carton Division is currently purchasing 5,100 tons of pulp per year from a supplier at a cost of $65 per ton Hrubec's predident is anxious for the Carton Division to begin puitchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (If any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree a transfer price for 5,100 tons of pulp next year? If the Pulp Division meets the price that the Carton Division is currently paying to its supplier and sells 5,100 tons of pulp to the Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whole? (Do not round intermediate calculations.) What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 5,100 tons of pulp next year? (Round your answers to nearest whole dollar amount.) Suppose the Carton Division's outside supplier drops its price to only $61 per ton. Should the Pulp Division meet this price? Should the Pulp Division meet this price? Req3 Req 4B If the Pulp Division does not meet the $61 price, what will be the effect on the profits of the company as a whole? Refer to requirement 4 . If the Pulp Division refuses to meet the $61 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? Refer to requirement 4. Assume that due to inflexible management policies, the Carton Division is required to purchase 5,100 tons of pulp each year from the Pulp Division at $72 per ton. What will be the effect on the profits of the company as a whole

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