Star Motors, Inc., operates as a decentralized multidivision company. The Vanelli division of Star Motors purchases most of its airbags from the airbag division. The airbag division's incremental cost for manufacturing the airbags is $120 per unit. The airbag division is currently working at 80% of capacity. The current market price of the airbags is $150 per unit. Read the quiremena Requirement 1. What is the minimum price at which the airbag division would sell airbags to the Vanelli division? The minimum price at which the airbag division would sell airbags to the Vanelli division is the Requirement 2. Suppose that Star Motors requires that whenever divisions with unused capacity sell products internally, they must do so at the incremental cost. Evaluate this transfer-pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. Determine whether transferring products internally at incremental cost has the following properties and give a reason why, Goal congruence Evaluating division performance Molivating management effort Preserving division autonomy Requirement 3. If the two divisions were to negotiate a transfer price, what is the range of possible transfer prices? exceed If the two divisions were lo negotiate a transfer price, the range of possible transfer prices will be between per unit. The airbag division will be willing to supply the airbags only of the transfer price equals or exceeds its The Vanelli division will be willing to buy airbags from the airbag division only if the price does not per airbag, the Evaluate this negotiated transfer pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. Goal congruence Evaluating division performance Motivating management effort Preserving division autonomy Requirement 4. Instead of allowing negotiation, suppose that Star specifies a hybrid transfer price that "splits the difference between the minimum and maximum prices from the divisions' standpoint. What would be the resulting transfer price for airbags? (Round your answer to the nearest whole dollar.) - X { I Requirements 1. 2. 3. What is the minimum price at which the airbag division would sell airbags to the Vanelli division? Suppose that Star Motors requires that whenever divisions with unused capacity sell products internally, they must do so at the incremental cost. Evaluate this transfer pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. If the two divisions were to negotiate a transfer price, what is the range of possible transfer prices? Evaluate this negotiated transfer pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. Instead of allowing negotiation, suppose that Star specifies a hybrid transfer price that "splits the difference" between the minimum and maximum prices from the divisions' standpoint. What would be the resulting transfer price for airbags? 4. Print Done Requirement 1. vnat is the minimum price at wnicn the airbag division would sell airbags to the vanelli divISION ! The minimum price at which the airbag division would sell airbags to the Vanelli division is the Requirement 2. Suppose that Star Motors requires that whenever divisions with unused capacity sell products internally, they must do so at the incremental cost. Evaluate this transfer pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. Determine whether transferring products internally at incremental cost has the following properties and give a reason why. Goal congruence Evaluating division performance Motivating management effort Preserving division autonomy Requirement 3. If the two divisions were to negotiate a transfer price, what is the range of possible transfer prices? If the two divisions were to negotiate a transfer price, the range of possible transfer prices will be between per unit. The airbag division will be willing to supply the airbags only of the transfer price equals or exceeds its The Vanelli division will be willing to buy airbags from the airbag division only if the price does not exceed per airbag, the Evaluate this negotiated transfer-pricing policy using the criteria of goal congruence, evaluating division performance, motivating management effort, and preserving division autonomy. Goal congruence Evaluating division performance Motivating management effort Preserving division autonomy Requirement 4. Instead of allowing negotiation, suppose that Star specifies a hybrid transfer price that "splits the difference between the minimum and maximum prices from the divisions' standpoint. What would be the resulting transfer price for airbags? (Round your answer to the neare whole dollar.) The hybrid transfer price for airbags is
