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 10 points ellook H Heferences Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $ 25,000 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 $89 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 transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-FiDivision, 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? 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-Fi Division? d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling 22.500 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold 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 (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntanly agree to the transfer of 5,000 speakers from the Audio Division to the H-Fi Division? 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-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 (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-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. Req 1A and 18 Req 10 Req 10 Req 2A and 20 Req 20 Reg 20 Reg 3A and 38 Reg 30 Reg 30 Assume the Audio Division sells only 20 000 sneakers ner vear to nutside customers om the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. Req 1A and 1B Req 1C Req 10 Req 2A and 28 Req 2C Req 2D Req 3A and 38 Req 3C Req 30 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 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? a Lowest acceptable transfer price b Highest acceptable transfer price Req 1A and 185 Req 1C > Show less Mc Graw you expect the division managers to voluntarily agree to the transfer of 5,000 speakers from the Audio Division to the H-Fi Division? RES any) between the two divisions? If left free to negotiate without interference, would d. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below. 18 Req 1A and Red 1C Req 10 Req 2A and Reg 2C Reg 3A and Req 20 Reg 30 Red 30 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-Fi Division? Assume the Audio Division is now selling only 20,000 speakers per year to outside customers. Identify the range of acceptable transfer prices (if any) OThere is not a range of acceptable transfer prices There is a range of acceptable transfer prices as shown below Transfer price Are the managers likely to agree on a transfer price? Yes No >