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In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Y
In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. value: 15.00 points Required: 1-a. Refer to the data in case A above. Assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. 1-b . If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes No value: 15.00 points 2-a.Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales. Determine the transfer price of the selling division. 2 . If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes No 2-c.What is the range of transfer price the managers of both divisions should agree? In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. value: 15.00 points Required: 1-a. Refer to the data in case A above. Assume in this case that $3 per unit in variable selling costs can be avoided on intracompany sales. 1-b . If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes No value: 15.00 points 2-a.Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales. Determine the transfer price of the selling division. 2 . If the managers are free to negotiate and make decisions on their own, will a transfer take place? Yes No 2-c.What is the range of transfer price the managers of both divisions should agree
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