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Requirements Requirement 1 . What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? 1.
Requirements Requirement 1 . What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? 1. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? 2. What is the maximum transfer price at which the AD manager would be willing to purchase screens from the SD? 3. Now suppose that the SD can sell only 85% of its output capacity of 20,000 screens per month on the open market. Capacity cannot be reduced in the short run. The AD can assemble and sell more than 20,000 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? b. From the point of view of Rainbow's management, how much of the SD output should be transferred to the AD? c. If Rainbow 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
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