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: Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5.000 speakers per year. It has received a quote of $133 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: 1. Assume the Audio Division sells only 20,000 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transter price for speakers sold to the Hi.Fi Division? b. From the standpoint of the HIF Division, what is the highest acceptable transfer price for speakers acquired from the ALiulio Diviston? c. 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 5.000 speakers from the Audio Division to the Hi: Fidivision? d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling 27.500 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold fo the Hi. Fibivison? b. From the standpoint of the HI. Fi Division, what is the highest acceptable transfer price for speakers acquited from the Audio Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left fice to negotiole without interference. would you expect the division managers to voluntarlly agree to the transfer af 5.000 speakers from the Aurllo bivition to the Hi A Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free fo negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 5.000 speakers from the Aciclio Division to the HH. Fidision? d. From the standpoint of the entire company, should the transfer take place? 3. Assume the Audio Division is selling 25,000 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-F 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 (f any) between the two divisions? If left free to negotiate wilthout interference. would you expect the division managers to voluntarily agree to the transfer of 5.000 speakers from the Audlo Division to the Hi. Fi Division? d. From the standpoint of the entire company. should the transfer take place? Complete this question by entering your answers in the tabs below. Assume the Audio Division is selling 25,000 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, whot is the highest acceptable transfer price for speakers acquired trom the Audio Division? a. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. 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 5,000 speakers fromit the Audia Division to the Hi-Fi Division? From the standpoint of the entire company, should the transfer take place? Assume the Audio Division is selling 25 ,co0 speakers per year to outside customers
