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 (hased on capacity) Capacity in units 5 112 5 94 $ 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The H-Fi Division will need 5.000 speakers per year. It has received a quote of $109 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-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 lett 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. o. 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? What is the range of acceptable transfer prices (if any) between the two divisions? I 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? 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? ile 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. Reg 1A and 18 Reg 10 Red Reg 2A and Reg 2C Reg 20 RSA and Rug C Reg30 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 HF Division b. From the standpoint of the Division, what is the highest acceptabile transfer price for speakers acquired from the Audio Division? * Lowest acceptable interior Die perdere Reg 10 >
