please organize it how the worksheet is formatted
Prontem 11-25 Basie Transfer Pricine Lot1-3 Afpha and Heta are divisions within the same company. The managern of trah divicions are, informatiem relative to the two divieiens: Required; 1. Refer to case 1 shown above. Alpha Division can avoid $2 per anit in corramissions on any sales to Beta Division. a. Whut is Alpha Divisions's lowes acceptabie transfer price? b. What is Befa Division's highest acceptable transfer price? c. What is the runge of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transer? Explain. 2. Refer to case 2 shown above. A srudy indicates that Alpha Division can avoid 55 per unit in shipping costs on any sales to Beta Division. a. What is Alpha Divisions's lowest acceptahle transfer price? b. What is Betal Division's highest acceptable trunsfer price? c. What is the range of acceptable transfer prices (if any) between the tuo divisions? Would you expect any dasagrecmient between the two divicional managers over what the exact transiet price should be? Fxplain. d. Assume Alpha Division oflers to sell 30,000 units to Beta Division for 588 per unit and that Beta Division rcfuses 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 8 fre price discotnt from the outside supplier. a. What is Alphat Divisions's lowest acceptable transfer price? b. What is Betn 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 isgree to a transfer? Explain d. Assume Beta Division offers to purchase 20,000 units from Aipha Division at So0 per unit. If Alphu Division accepts this price, would you expect its ROl to increase, decrease. or remain urichanged? Why? 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 120,000 units of a different product from the one Alpha Division is producing. now. The new product would require $21 per unit in variable costs and would require that-Alpha Division cut back production of its present product by 45,000 units annually. What is Alpha Division's lowest acceptable transfer price? Problem 11-25 1a., 1b., and 1c.: From the standpoint of the selling division, Alpha Division: Transfer Price > or = But, from the standpoint of the buying division, Beta Division: Transfer Price or = From the standpoint of the buying division, Beta Division: Transfer Price or = Prontem 11-25 Basie Transfer Pricine Lot1-3 Afpha and Heta are divisions within the same company. The managern of trah divicions are, informatiem relative to the two divieiens: Required; 1. Refer to case 1 shown above. Alpha Division can avoid $2 per anit in corramissions on any sales to Beta Division. a. Whut is Alpha Divisions's lowes acceptabie transfer price? b. What is Befa Division's highest acceptable transfer price? c. What is the runge of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transer? Explain. 2. Refer to case 2 shown above. A srudy indicates that Alpha Division can avoid 55 per unit in shipping costs on any sales to Beta Division. a. What is Alpha Divisions's lowest acceptahle transfer price? b. What is Betal Division's highest acceptable trunsfer price? c. What is the range of acceptable transfer prices (if any) between the tuo divisions? Would you expect any dasagrecmient between the two divicional managers over what the exact transiet price should be? Fxplain. d. Assume Alpha Division oflers to sell 30,000 units to Beta Division for 588 per unit and that Beta Division rcfuses 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 8 fre price discotnt from the outside supplier. a. What is Alphat Divisions's lowest acceptable transfer price? b. What is Betn 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 isgree to a transfer? Explain d. Assume Beta Division offers to purchase 20,000 units from Aipha Division at So0 per unit. If Alphu Division accepts this price, would you expect its ROl to increase, decrease. or remain urichanged? Why? 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 120,000 units of a different product from the one Alpha Division is producing. now. The new product would require $21 per unit in variable costs and would require that-Alpha Division cut back production of its present product by 45,000 units annually. What is Alpha Division's lowest acceptable transfer price? Problem 11-25 1a., 1b., and 1c.: From the standpoint of the selling division, Alpha Division: Transfer Price > or = But, from the standpoint of the buying division, Beta Division: Transfer Price or = From the standpoint of the buying division, Beta Division: Transfer Price or =
