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 $ 110 $.8 25,000 Selling price per unit on the intermediate market $ 128 Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units Sako Company has a HEF Division that could use this speaker in one of its products. The H-F Division will need 5.000 speakers per year. It has received a quote of $125 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-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? What is the range of acceptable transfer prices (if any) between the two divisions? At 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, 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-F 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 H I Division? d. From the standpoint of the entire company, should the transfer take place? 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 HF 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-Fi Division? b. From the standpoint of the HF Division, what is the highest acceptable transfer price for speakers acquired from the Audio c. What is the range of acceptable transfer prices (if any) between the two divisions: nett Tree 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 Division? Complete this question by entering your answers in the tabs below. Reg 1A and 1B Reg 10 Reg 2A and 28 Red 1C Reg 20 Req 20 Reg 3A and 3B Reg 30 Reg 3D 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-A 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 Highest acceptable transfer price
