I) Chapter 11A Transfer Pricing Problem-Original Data Collier Products, Inc. has a Valve Divsion that manufacturers and sells a standard valve: 100,000 $60.00 $26.00 6.00 18.00 Capacity in Units Selling price to Outside Customers Variable Product Costs per Unit Variable Selling Expenses per Unit Fixed Costs Per Unit Based on Capacity he company has a Pump Division that could use this valve in one of its pumps. The Pump Division is currently purchasing 10,000 valves per year from an overseas supplier at a cost of S58 per valve Situation A Reguired: . Assume that the Valve Division is producing and selling 80,000 units to outside customers. What is the acceptable range, if any, for the transfer price between the two divisions? (Note: you MUST show all work and calculations and you MUST use the formula/model presented in Chapter 11A) Assume that the Valve Division is producing and selling 95,000 units to outside customers. Due to quality concerns, the Management of the Pump Division believes that it is imperative of purchase ALL of its valves from the same supplier (either an outside company or the Valve Division of Collier). What is the acceptable range, if any, for the transfer price between the two divisions? Note: you MUST show all work and calculations and you MUST use the formula/model presented in Chapter 1IA) 2. 3. Assume that the Valve Division is selling all of the valves that it can produce to outside customers What is the acceptable range, if any, for the transfer price between the two divisions? Note: you MUST show all work and calculations and you MUST use the formula/model presented in Chapter 11A) Assume again that the Valve Division is selling all of the valves that it can produce to outside customers. Also assume that the $6.00 in Variable Selling Expenses can be avoided on transfers within the company, due to reducing selling costs. What is the acceptable range, if any, for the transfer price between the two divisions? Note: you MUST show all work and calculations and you MUST use the formula/model presented in Chapter 1 1A) 4. Situation IB efet to the original data about Collier Products, Inc. Assume that the Pump Division needs 20,000 special high-pressure sure valves per year. The Valve Division's cost to Manufacture and ship the special valve would nit. To produce the special valves, the Valve Division would have to reduce its production and sal S0aes from 100,000 units (to outside customers) per year to 75,000 units per year regular valves As far as the Valve Division is concermed, what is the lowest aceeptable transfer price