K The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operati at capacity, incurs an incremental manufacturing cost of $95 per screen. The SD can sell all its output to the outside market at a price of $120 per screen, after incurring a variable marketing and distribution cost of $10 per screen. If the AD purchases screens from outside suppliers at a price of $120 per screen, it will incur a variable purchasing cost of $4 per screen. Slate's division managers can act autonomously to maximize their own division's operating income. Read the requirements. Requirement 1. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? Opportunity cost per screen Minimum transfer price Requirement 2. What is the maximum transfer price at which the AD manager would be willing to purchase screens from the SD? Maximum transfer price Requirement 3. Now suppose that the SD can sell only 75% of its output capacity of 5,000 screens per month on the open market. Capacity cannot be reduced in the short run. The AD can assemble and sell more than 5,000 TV sets per month. a. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? (Select the group(s) of units and enter the minimum transfer price for each group.) Units Minimum transfer price b. From the point of view of Slate's management, how much of the SD output should be transferred to the AD? c. If Slate mandates the SD and AD managers to "split the difference" on the minimum and maximum transfer prices they would be willing to negotiate over, what would be the resulting transfer price? Does this price achieve the outcome desired in requirement 3b? (Use the minimum transfer price from requirement 1. when calculating this amount. Round your answer to the nearest who dollar.) Next The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at capacity, incurs an incremental manufacturing cost of $95 per screen. The SD can sell all its output to the outside market at a price of $120 per screen, after incurring a variable marketing and distribution cost of $10 per screen. If the AD purchases screens from outside suppliers at a price of $120 per screen, it will incur a variable purchasing cost of $4 per screen. Slate's division managers can act autonomously to maximize their own division's operating income. Read the equirement. Requirement 2. What is the maximum transfer price at which the AD manager would be willing to purchase screens from the SD? Maximum transfer price Requirement 3. Now suppose that the SD can sell only 75% of its output capacity of 5,000 screens per month on the open market. Capacity cannot be reduced in the short run. The AD can assemble and sell more than 5,000 TV sets per month. a. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? (Select the group(s) of units and enter the minimum transfer price for each group) Units Minimum transfer price b. From the point of view of State's management, how much of the SD output should be transferred to the AD? e. If Slate mandates the SD and AD managers to "split the difference" on the minimum and maximum transfer prices they would be willing to negotiate over, what would be the resulting transfer price? Does this price achieve the outcome desired in requirement 3b? (Use the minimum transfer price from requirement 1. when calculating this amount. Round your answer to the nearest whole dollar) If the managers of the AD and the SD would settle on a transfer price of achieve the desired outcome. they