[The following information applies to the questions displayed below.] In each of the cases below, assume Division X has a product that can be sold to outside customers or to Division Y of the same company. The managers of the divisions are evaluated based on their divisional profits. Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) Division Y: Number of units needed for production Purchase price per unit now being paid to an outside supplier A Case 95,000 105,000 95,000 88,000 $ 30 $58 $25 $8 17,000 B $51 $19 $4 17,000 $38

Complete this question by entering your answers in the tabs below. What is the highest acceptable transfer price from the perspective of the buying division? [The following information applles to the questions displayed below] In each of the cases below, assume Division X has a product that can be sold to outside customers or to Division Y of the same company. The managers of the divisions are evaluated based on their divisional profits. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place? Required: 2. Refer to the data in case B above in this case, there will be no savings in variable selling costs on intracompany sales a. What is the lowest acceptable transfer price from the perspective of the selling division? b. What is the highest acceptable transfer price from the perspective of the buying division? c. What is the range of acceptable transfer prices (if any) between the Nwo divisions? If the managers are free to negotiate and make decisions on their own, will a transfer probably take place? Complete this question by entering your answers in the tabs below. What is the lowest acceptable transfer price from the perspective of the selling division