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 internediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units $ be $ 42 $ 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products The Hi Division will need 5,000 speakers per year. It has received a quote of $57 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 fif 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 H-F Division? d. From the standpoint of the entire company should the transfer take place? Return to 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? 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 voluntarily agree to the transfer of 5,000 speakers from the Audio Division to the Hi-F 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 H-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 (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? Reg 1A and 1B Req 1C Req 1D Req 2A and 2B Req 2c Req 2D Req 3A and 3B Req 3C Reg 3D 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? Show less $ a Lowest acceptable transfer price Highest acceptable transfer price 60 X 57 b. $ Req 1A and 1B Reg 10 Req 2A and 2B Req 1C Req 2c Req 3A and 3B Req 2D Req 3D Req 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 selling 22,500 speakers per year to outside customers. 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 42 5 $ price 57 Are the managers likely to agree on a transfer price? Yes ONO TE Reg 1A and 1B Reg 10 Req 10 Req 2A and 2B Req 2c Reg 2D Req 3A and 3B Reg 30 Req 3D 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? Show less a IS 57 X Lowest acceptable transfer price Highest acceptable transfer price b $ 60 Req 1A and 1B Req 2A and Reg 10 Req ID Req 2c Req 3A and 3B Req 2D Reg 3C Reg 3D 28 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 selling 25,000 speakers per year to outside customers. 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 $ 60 Transfer 5 S price 57 Are the managers likely to agree on a transfer price? Yes No D D