Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products Sales and cost data on the speaker follow: Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $ 42 18 $ 8 57.000 Sako Company has a H-F Division that could use this speaker in one of its products. The Hi-Fi Division will need 11,000 speakers per year. It has received a quote of $33 per speaker from another manufacturer Sako Company evaluates division managers on the basis of divisional profits. Required: 1. Assume the Audio Division is now selling only 46,000 speakers per year to outside customers a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c What is the range of acceptable transfer prices of any between the two divisions? Ieft free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 1.000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling all of the speakers it can produce to outside customers, 3. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c. What is the range of acceptable transfer prices of any between the two divisions of left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 11000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company should the transfer take place? the Au c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interfer you expect the division managers to voluntarily agree to the transfer of 11,000 speakers from the Audio Division to the HI-F d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling all of the speakers it can produce to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Divi b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Au Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interfer you expect the division managers to voluntarily agree to the transfer of 11,000 speakers from the Audio Division to the HI-F d. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 1c Reg 1D Req 2A Reg 28 Reg 2C Reg 2D From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? Assume the Audio Division is now selling only 46,000 speakers per year to outside customers. Lowest acceptable transfer price Req 18 > Pec managers to Voluntarily agree to the transfer of 1,000 speakers from the Audio D d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling all of the speakers it can produce to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers SC b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers ac Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negoti you expect the division managers to voluntarily agree to the transfer of 11,000 speakers from the Audio d. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. Req 1A Red 1B Req 1C Req ID Rec Reg 2A Req 2B Reg 20 From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquire Division? Assume the Audio Division is now selling only 46,000 speakers per year to outside customers. Highest acceptable transfer price Req 1A Req 1C or speakers acquired from Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? I left free to negotiate without you expect the division managers to voluntarily agree to the transfer of 11,000 speakers from the Audio Division to t d. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 1C Reg 1D Reg 2A Reg 26 Req 2c Reg 2D What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without Interference, would you expect the division managers to voluntarily agree to the transfer of 11,000 speakers from the Division to the Hi-Fi Division? Assume the Audio Division is now selling only 46,000 speakers per year to outside custom 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 Are the managers likely to agree on a transfer price? Yes O No
