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kindly help me and solve asap Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their
kindly help me and solve asap
Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's return on investment (ROI). Assume the following information relative to the two divisions: Case 1 Alpha Division 2 Capacity in units Number of units now being sold to 56,000 284,000 104.000 198,000 outside customers 56,000 284.000 Selling price per unit to outside 77.000 198,000 customers $ 96 $ 42 $ Variable costs per unit 67 $ 43 $ 60 $ 21 S 42 $ 29 Pixed costs per unit (based on capacity) $ 22 $ 12 $ 24 $ 4 Beta Division Number of units needed annually 10,100 66,000 23,000 56,000 Purchase price now being paid to an outside supplier $ 90 S 41 5 67 *Before any purchase discount Required: 1. Refer to case 1 shown above. Alpha Division can avoid $3 per unit in commissions on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $5 per unit in shipping costs on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? Anne Anker cenn.. Denne tenth Date and then . *Before any purchase discount Required: 1. Refer to case 1 shown above, Alpha Division can avoid $3 per unit in commissions on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $5 per unit in shipping costs on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 66,000 units to Beta Division for $40 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 5% price discount from the outside supplier. I a. What is Alpha Division's lowost acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? d. Assume Bota Division offers to purchase 23.000 units from Alpha Division at $58.65 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 56,000 units of a different product from the one Alpha Division is producing now. The new product would require $23 per unit in variable costs and would require that Alpha Division cut back production of its present product by 28,000 units annually. What is Alpha Division's lowest acceptable transfer price? Req 1A to 1C Reg 2A to 2D Reg 3A to 3D Req 4 1. Refer to case 1 shown above. Alpha Division can avoid $3 per unit in commissions on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What Is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer prloo Identify the range of acceptable transfer prices (if any) There is not a range of acceptable transfer prices. There is a range of acceptable transfer prices as shown below: Transfer price s Will the managers agree to the trade? OYes No Reg 1A to 1C Reg 2A to 2D Req 3A to 3D Req 4 2. Refer to case 2 shown above. A study indicates that Alpha Division can avold $5 per unit in shipping costs on any sales to Beta Division. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 66,000 units to Beta Division for $40 per unit and that Beta Division refuses this price What will be the loss in potential profits for the company as a whole? Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any) There is not a range of acceptable transfer prices. There is a range of acceptable transfer prices as shown below: Transfer price s s Will the managers agree to the trade? Yes No Loss in potential profits for the company Keq 1A to 1C Reg 2A to 2D Req 3A to 3D Req 4 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 5% price discount from the outside supplier. a. What is Alpha Division's lowest acceptable transfer price? b. What Is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? d. Assume Beta Division offers to purchase 23,000 units from Alpha Division at $58.65 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? (Round your final answers to 2 decimal places.) Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any) There is not a range of acceptable transfer prices. There is a range of acceptable transfer prices as shown below: Transfer price s Will the managers agree to the trade? Yes No Division A's ROI should Increase CA O Reg 3A to 3D Req 4 Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 56,000 units of a different product from the one Alpha Division is producing now. The new product would require $23 per unit in variable costs and would require that Alpha Division cut back production of its present product by 28,000 units annually. What is Alpha Division's lowest acceptable transfer price? Show less Lowest accoptable transfer price Step by Step Solution
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