please answer A and B
Picing 199 Zee Spin Wedges Zee Spin manu attack wedge) that vary with l among professional Spin wedges consist of three parts: club and shafts and purchases is sold to dis designed to match the playing characteristics of the Zee Spin wedge club head factures a line of golf club wedges (sand wedge, pitching wedge, lob wedge, and oft and club head sole design. The wedges have become very popular ious golfers because of their unique club head design and shafts. All Zee head, shaft, and grip. Zee Spin manufactures the club heads the grips. The three components are assembled to produce a wedge that tributors, who then sell them to golf pro shops and websites. The shafts are specia he following table summarizes the total costs of p the various models of Zee Spin wedges (sand wedge have the same cost structure roducing a complete Zee Spin wedge. All , pitching wedge, lob wedge, and attack wedge) Club Head Shaft Total Variable manufacturing cost Variable selling cost Fixed manufacturing cost Other common fixed costs Grip Total cost $16.05 27.53 5.43 10.69 6.43 2.50 $52.58 $11.48 4.17 6.52 Zee Spin traditionally only sold complete wedges (club head, shaft, and grip), and the company was treated as a single profit center. But with the success of the Zee Spin brand and recent inquirie from other club makers about purchasing just Zee Spin shafts, which are unique in the industry, Zee Spin is going to sell both complete wedges (as they do now) and individual shafts. To implemen this strategy, Zee Spin will create two profit centers: Wedges and Shafts. The Shaft profit center wil produce shafts for external customers, as well as for the Zee Spin Wedge profit center. There will be two profit center managers in Zee Spin that will be rewarded based on the profits of their respective profit centers. The Zee Spin wedges will continue to be sold for $75 per complete wedge, while the shafts will be sold for $23 per shaft. Shafts that are sold externally will incur variable selling costs of $2.43 (primarily sales commis sion and shipping). These costs are not incurred for shafts sold internally to the Wedge profit center Required The owners of Zee Spin want to maximize profits and realize that, to properly motivate the managers of the Wedges and Shafts profit centers, they need to set the proper transfer price for the shafts produced by the Shafts profit center and sold to the Wedges profit center Using the actual data provided in the problem, what transfer price should be used for the shafts produced by the Shafts profit center and sold to the Wedges profit center? (Your answer should be a specific number, such as $18.00.) a. b. After implementing the transfer price policy you described in part (a), what problems izing behaviors by the two profit center managers should the owners of Zee Spin expect to occur? should the owners of Zee Spin anticipate? Stated differently, what non-firm-value maxi Picing 199 Zee Spin Wedges Zee Spin manu attack wedge) that vary with l among professional Spin wedges consist of three parts: club and shafts and purchases is sold to dis designed to match the playing characteristics of the Zee Spin wedge club head factures a line of golf club wedges (sand wedge, pitching wedge, lob wedge, and oft and club head sole design. The wedges have become very popular ious golfers because of their unique club head design and shafts. All Zee head, shaft, and grip. Zee Spin manufactures the club heads the grips. The three components are assembled to produce a wedge that tributors, who then sell them to golf pro shops and websites. The shafts are specia he following table summarizes the total costs of p the various models of Zee Spin wedges (sand wedge have the same cost structure roducing a complete Zee Spin wedge. All , pitching wedge, lob wedge, and attack wedge) Club Head Shaft Total Variable manufacturing cost Variable selling cost Fixed manufacturing cost Other common fixed costs Grip Total cost $16.05 27.53 5.43 10.69 6.43 2.50 $52.58 $11.48 4.17 6.52 Zee Spin traditionally only sold complete wedges (club head, shaft, and grip), and the company was treated as a single profit center. But with the success of the Zee Spin brand and recent inquirie from other club makers about purchasing just Zee Spin shafts, which are unique in the industry, Zee Spin is going to sell both complete wedges (as they do now) and individual shafts. To implemen this strategy, Zee Spin will create two profit centers: Wedges and Shafts. The Shaft profit center wil produce shafts for external customers, as well as for the Zee Spin Wedge profit center. There will be two profit center managers in Zee Spin that will be rewarded based on the profits of their respective profit centers. The Zee Spin wedges will continue to be sold for $75 per complete wedge, while the shafts will be sold for $23 per shaft. Shafts that are sold externally will incur variable selling costs of $2.43 (primarily sales commis sion and shipping). These costs are not incurred for shafts sold internally to the Wedge profit center Required The owners of Zee Spin want to maximize profits and realize that, to properly motivate the managers of the Wedges and Shafts profit centers, they need to set the proper transfer price for the shafts produced by the Shafts profit center and sold to the Wedges profit center Using the actual data provided in the problem, what transfer price should be used for the shafts produced by the Shafts profit center and sold to the Wedges profit center? (Your answer should be a specific number, such as $18.00.) a. b. After implementing the transfer price policy you described in part (a), what problems izing behaviors by the two profit center managers should the owners of Zee Spin expect to occur? should the owners of Zee Spin anticipate? Stated differently, what non-firm-value maxi
