Please solve all questions correctly, step by step.

Chapter 11(3) 0 Saved Help Save& Exit Submit 10 Check my work 1 Problem 11-20 (Algo) Transfer Price with an Outside Market [LO11-3] Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper 10 goods. Revenue and costs associated with a ton of pulp follow: points Selling price $ 106 Expenses: Variable $ 78 9300" Fixed (based on a capacity of . 50,000 tons per year) 18 96 an Net operating income $ 10 References Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager ofthe Carton Division is currently purchasing 6,800 tons of pulp per year from a supplier at a cost of $99 per ton. Hrubec's president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division ifthe managers of the two divisions can negotiate an acceptable transfer price. Required: For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $106 per ton. 1. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? 2. Ifthe Pulp Division meets the price that the Carton Division is currently paying to its supplier and sells 6,800 tons of pulp to the Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whole? For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $106 price. 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton' Should the Pulp Division meet this price? % Prev 1 of 3 5!! Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 1O Check mywork Selling price $ 106 Expenses: Variable $ 78 Fixed (based on a capacity of 50,000 tons per year) 18 96 10 Net operating income $ 10 points Hrubec Products has just acquired a small company that manufactures paper cartons' Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 6,800 tons of pulp per year from a supplier at a eBook cost of $99 per ton. Hrubec's president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division ifthe P. ' managers of the two divisions can negotiate an acceptable transfer price. [In References ReqUiI'Edi For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $106 per ton. 1. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? 2. Ifthe Pulp Division meets the price that the Carton Division is currently paying to its supplier and sells 6,800 tons of pulp to the Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whole? For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $106 price. 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. Ifthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? 6' Refer to (4) above Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? % Prev 1 of 3 5!! Next > Chapter 11(3) i Saved Help Save & Exit Submit 10 Check my work 5. KeTer to (4) above. IT the Pulp Division refuses to meet the py5 price, should the Carton Division be required to purchase from ine Pulp Division at a higher price for the good of the company as a whole? 6. Refer to (4) above. Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the profits of the company as a whole? 10 points Complete this question by entering your answers in the tabs below. eBook Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Req 6 Print References What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? (Round "Maximum transfer price" answer to 1 decimal place.) Range of acceptable transfer prices Are the managers likely to voluntarily agree to a transfer price for 5,000 tons of pulp next year? Mc Graw Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work .c..t.........., .43.-\" w c. \"snow. put\". w. cg--- w..- y. ,sc..,. ..w..,'_w . 4a. Suppose the Canon Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. lfthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from th Pulp Division at a higher price for the good of the company as a whole? 6. Refer to (4) above. Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 3 Req 4A Req 4B Req 5 Req 6 If the Pulp Division meets the price that the Carton Division is currently paying to its supplier and sells 6,800 tons of pulp to the Carton Division each year, what will be the effect on the prots of the Pulp Division, the Carton Division, and the company as a whole? (Do not round intermediate calculations.) a. Profits of the Pulp Division will b. Profits of the Carton Division will c. Prots of the company as a whole will Prev 1 of 3 : Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work 5. Refer to (4) above. lfthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from th Pulp Division at a higher price for the good of the company as a whole? 6. Refer to (4) above. Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 4A Req 4B Req 5 Req 6 What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely to voluntarily agree to a transfer price for 6,800 tons of pulp next year? (Round your answers to nearest whole dollar amount.) Show lessA Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Range of acceptable transfer prices: Prev 1 of 3 5!! Next ) _1_ Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whol For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $106 price. 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? Wha the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely voluntarily agree to a transfer price for 6,800 tons of pulp next year? 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. Ifthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? 6' Refer to (4) above Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4B Req 5 Req 6 Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? Should the Pulp Division meet this price? :I Prev 1 of 3 : Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whol For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $106 price. 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? Wha the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely voluntarily agree to a transfer price for 6,800 tons of pulp next year? 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. Ifthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good ofthe company as a whole? 6. Refer to (4) above Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 5 Req 6 Prot of the company will Prev 1 of 3 === Next > "' Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whol For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the stated $106 price. 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? Wha the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely voluntarily agree to a transfer price for 6,800 tons of pulp next year? 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. Ifthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? 6' Refer to (4) above Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 6 Refer to (4) above. If the Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? Should the Carton Division be required to purchase from the Pulp Division :I Prev 1 of 3 === Next > . Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work Carton Division each year, what will be the effect on the profits of the Pulp Division, the Carton Division, and the company as a whol For (3)(6) below, assume that the Pulp Division is currently selling only 30,000 tons of pulp each year to outside customers at the " stated $106 price. . T\" 9 3. What is the Pulp Division's lowest acceptable transfer price? What is the Carton Division's highest acceptable transfer price? Wha " 5 the range of acceptable transfer prices (if any) between the two divisions? Are the managers of the Carton and Pulp Divisions likely ( voluntarily agree to a transfer price for 6,800 tons of pulp next year? f 4a. Suppose the Carton Division's outside supplier drops its price to only $95 per ton. Should the Pulp Division meet this price? 4-b. If the Pulp Division does not meet the $95 price, what will be the effect on the profits ofthe company as a whole? 5. Refer to (4) above. Ifthe Pulp Division refuses to meet the $95 price, should the Carton Division be required to purchase from the Pulp Division at a higher price for the good of the company as a whole? 6' Refer to (4) above Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the prots of the company as a whole? Complete this question by entering your answers in the tabs below. Req 1 Req 2 Req 3 Req 4A Req 4B Req 5 Refer to (4) above. Assume that due to inflexible management policies, the Carton Division is required to purchase 6,800 tons of pulp each year from the Pulp Division at $106 per ton. What will be the effect on the profits of the company as a whole? The company as a whole will have a(n) - in prot by _ Prev 1 of 3 : Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 1O Check my work 2 Problem 11-25 (Algo) Basic Transfer Pricing [LO11-3] 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: 10 points Case 1 2 3 4 Alpha Division: eBook Capacity in units 85,000 405,000 155,000 305,000 Number of units now being sold to Pm outside customers 85,000 405,000 105,000 305,000 Selling price per unit to outside References customers $ 40 $ 100 $ 100 $ 60 Variable costs per unit $ 28 $ 75 $ 65 $ 36 Fixed costs per unit (based on capacity) $ 6 $ 15 $ 20 $ 9 Beta Division: Number of units needed annually 10,000 35,000 25,000 121,000 Purchase price now being paid to an outside supplier $ 37 $ 99 $ 100* *Before any purchase discount. Required: 1. Refer to case 1 shown above. Alpha Division can avoid $2 per unit in commissions on any sales to Beta Division. 3. 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? _ \"1..-\"- A... ___i._ _: ____._._i_._ ......l... __:___ n: __..\\ i._L..___ \".1 1...i _I:..:_:_.__'x u:.....-._.. i..__i1 __.. .1: __________ A I. .2\".-- \".1 % ( Prev 2 of 3 5E! Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 2 'DeTOI'e any purcnase DISCOUHI. Required: 1. Refer to case 1 shown above. Alpha Division can avoid $2 per unit in commissions on any sales to Beta Division. a. What is Alpha Division's lowest acceptable transfer price? 10 b. What is Beta Division's highest acceptable transfer price? points c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer 10 Check my work 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 eBook Division. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? References 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 305,000 units to Beta Division for $98 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? Print 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 8% 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 25,000 units from Alpha Division at $85 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 121,000 units of a different product from the one Alpha Division is producing now. The new product would require $31 per unit in variable costs and would require that Alpha Division cut back production of its present product by 45,375 units annually. What is Alpha Division's lowest acceptable transfer pnce? Complete this question by entering your answers in the tabs below. % ( Prev 2 of 3 EEE Next > ? '7 Chapter 11(3) 0 Saved Help Save& Exit Submit 1O Check my work 2 Alpha Division cutback production of its present product by 45,375 units annually. What is Alpha Division's lowest acceptable trans pnce? 10 Complete this question by entering your answers in the tabs below. points Req 1A to 1C Req 2A to 2D Req 3A to 3D Req 4 eBook 1. Refer to case 1 shown above. Alpha Division can avoid $2 per unit in commissions on any sales to Beta Division. P' t m a. What is Alpha Division's lowest acceptable transfer price? References 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 lessA Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Range of acceptable transfer prices Will the managers agree to the trade? Req 2A to 2D > % Chapter 11(3) 0 Saved Help Save& Exit Submit 1O Check my work 2 Alpha Division cut back production of its present product by 45,375 units annually. What is Alpha Division's lowest acceptable trans pnce? Complete this question by entering your answers in the tabs below. 10 points Req 1A to 1C Req 2A to 2D Req 3A to 3D Req 4 eBook VVVVVVVVVVVVVVVVVVVVVVV PM 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. References 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 305,000 units to Beta Division for $98 per unit and that Beta Division refuses this price. What will be the loss in potential prots for the company as a whole? Show lessA Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Range of acceptable transfer prices :I Will the managers agree to the trade? Loss in potential prots for the company I I % Chapter 11(3) 0 Saved Help Save& Exit Submit 2 10 Check my work Complete this question by entering your answers in the tabs below. 10_ Req 1A to 1C Req 2A to 2D Req 3A to 3D Req 4 pomts 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 8% price discount from the outside supplier. eBaok a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? prim c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? References d. Assume Beta Division offers to purchase 25,000 units from Alpha Division at $60 per unit. If Alpha Division accepts this price, would you expect its R01 to increase, decrease, or remain unchanged? Show IessA Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Range of acceptable transfer prices Will the managers agree to the trade? Division A's ROI should % Chapter 11(3) 0 Saved Help Save& Exit Submit 10 Check my work I yUU EKpELl ll: KUI lU II ILIEdbE, ut'th'dbE, UI IEIIIdIlI UI ILlldllgEu.' 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 121,000 units of a different produ 7 P; ' from the one Alpha Division is producing now. The new product would require $31 per unit in variable costs and would require that -' ' 9 Alpha Division cut back production of its present product by 45,375 units annually. What is Alpha Division's lowest acceptable trans ' 10 price? f points Complete this question by entering your answers in the tabs below. eBook Print Req 1A to 1C Req 2A to 2D Req 3A to 3D References 4. Refer to case 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 121,000 units of a different product from the one Alpha Division is producing now. The new product would require $31 per unit in variable costs and would require that Alpha Division cut back production of its present product by 45,375 units annually. What is Alpha Division's lowest acceptable transfer price? Show lessA Lowest acceptable transfer price I % ( Prev 2 of 3 "' ::: Next > Chapter 11(3) 0 Saved Help Save& Exit Submit 10 points eBook Print References 10 Check my work Case 11-26 (Algo) Transfer Pricing; Divisional Performance [LO11-3] Weller Industries is a decentralized organization with six divisions. The company's Electrical Division produces a variety of electrical items, including an X52 electrical fitting. The Electrical Division (which is operating at capacity) sells this tting to its regular custom for $10.40 each; the fitting has a variable manufacturing cost of $5.35. The company's Brake Division has asked the Electrical Division to supply it with a large quantity of X52 fittings for only $8.40 each. The Brake Division, which is operating at 50% of capacity, will put the fitting into a brake unit that it will produce and sell to a large commercial airline manufacturer. The cost of the brake unit being built by the Brake Division follows: Purchased parts (from outside vendors) $ 25.00 Electrical fitting X52 8.40 Other variable costs 15.09 Fixed overhead and administration 9.10 Total cost per brake unit $ 57.59 Although the $840 price for the X52 fitting represents a substantial discount from the regular $10.40 price, the manager of the Brake Division believes the price concession is necessary if his division is to get the contract for the airplane brake units. He has heard \"through the grapevine" that the airplane manufacturer plans to reject his bid if it is more than $59 per brake unit. Thus, if the Brake Division is forced to pay the regular $10.40 price for the X52 fitting, it will either not get the contract or it will suffer a substantial loss at a time when it is already operating at only 50% of capacity. The manager ofthe Brake Division argues that the price concession is imperative to the wellbeing of both his division and the company as a whole. Weller Industries uses return on investment (ROI) to measure divisional performance. Required: 1. Assume that you are the manager of the Electrical Division. a. What is the lowest acceptable transfer price for the Electrical Division? b. Would you supply the X52 tting to the Brake Division for $8.40 each as requested? 2. Assuming the airplane brakes can be sold for $59. what is the financial advantage (disadvantage) for the company as a whole (on a