Sako Company's Audio Division produces a speaker that Is used by manufacturers of varlous audio products. Sales and cost data on

the speaker follow:

Selling price per unit on the intermediate market $$100$

variable costs per unit $$82$

Fixed costs per unit $($based on capacity$)$ $$8$

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 recelved a quote of $$97$ per speaker from another manufacturer. Sako Company evaluates division managers on the basis

of divisional profits.

Required:

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?

c$.$ What is the range of acceptable transfer prices $($If any$)$ between the two divisions? If left free to negotlate without interference, would

you expect the division managers to voluntarlly agree to the transfer of $5,000$ speakers from the Audlo DIvision to the HI$-$FI DIVIslon?

d$.$ From the standpoint of the entire company, should the transfer take place?

Assume the Audlo 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 negotlate without interference, would

you expect the division managers to voluntarlly 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?

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$-$Fl 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 dlvisions? If left free to negotlate without interference, would

you expect the division managers to voluntarlly agree to the transfer of $5,000$ speakers from the Audlo DIvision to the HI$-$FI DIVIslon?

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 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?

$*****$Please answer all aspects of the question