The Scott Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit centre. Each division manager has been delegated full authority on all decisions involving the sale of that division's output both to outsiders and to other divisions of Scott (Click the icon to view the information on the divisions) Requirement 1. Assume that there are no alternative uses for internal facilities of Division A Determine whether the company as a whole will benest if Division C purchases the component from extemal suppliers for $110 per unit. What should the transfer price for the component be set at so that division managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? Begin by completing the table below to calculate the net cost (benefit) to the company as a whole. (Enter a net benefit using parentheses or a minus sign) Less Net cost (benett) to company as a whole The company as a whole benefit if Division C purchases the component from external suppliers for $110 per unit. What should the transfer price for the component be set at so that division managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? The transfer price should be set Requirement 2. Assume that internal facilities of Division A would not otherwise be idle. By not producing the 1.900 units for Division C, Division A's equipment and other facilities would be used for other production operations that would result in annual cash-operating savings of $22.000 Should Division C purchase from external suppliers? Show your computations Begin by completing the table below to calculate the net coat (benefit) to the company as a whole. (Enter a net benefit using parentheses or a minus sign) Less Net cost (benefit) to company as a whole Division information Division C has, in the past, always purchased its requirement of a particular tractor-engine component from Division A. However, when informed that Division A is increasing its selling price to $135, Division C's manager decides to purchase the engine component from external suppliers. Division C can purchase the component for $110 per unit in the open market. Division A insists that because of the recent installation of some highly specialized equipment and the resulting high depreciation charges, it will not be able to earn an adequate return on its investment unless it raises its price. Division A's manager appeals to top management of Scott for support in the dispute with Division C and supplies the following operating data: C's annual purchase of the tractor-engine component A's variable cost per unit of the tractor-engine component A's fixed cost per unit of the tractor-engine component 1,900 units $105 $15 Print Done - Required - x 1. Assume that there are no alternative uses for internal facilities of Division A. Determine whether the company as a whole will benefit if Division C purchases the component from external suppliers for $110 per unit. What should the transfer price for the component be set at so that division managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? 2. Assume that internal facilities of Division A would not otherwise be idle. By not producing the 1,900 units for Division C, Division A's equipment and other facilities would be used for other production operations that would result in annual cash-operating savings of $22,000. Should Division C purchase from external suppliers? Show your computations. 3. Assume that there are no alternative uses for Division A's internal facilities and that the price from outsiders drops $20. Should Division C purchase from external suppliers? What should the transfer price for the component be set at so that divisior managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? bl cti Print Done up es The Scott Corporation, manufacturer of tractors and other heavy farm equipment, is organized along decentralized product lines, with each manufacturing division operating as a separate profit centre. Each division manager has been delegated full authority on all decisions involving the sale of that division's output both to outsiders and to other divisions of Scott. (Click the icon to view the information on the divisions.) Required other production operations that would result in annual cash-operating savings of $22,000. Should Division C purchase from external suppliers? Show your computations Begin by completing the table below to calculate the net cost (benefit) to the company as a whole. (Enter a net benefit using parentheses or a minus sign.) Less Net cost (benefit) to company as a whole Division C purchase the component from external suppliers for $110 per unit. Requirement 3. Assume that there are no alterative uses for Division A's internal facilities and that the price from outsiders drops $20. Should Division C purchase from external suppliers? What should the transfer price for the component be set at so that division managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? Begin by completing the table below to calculate the net cost (benefit) to the company as a whole. (Enter a net benefit using parentheses or a minus sign.) Less Net cost (benefit) to company as a whole In this scenario, Division C purchase the component from external suppliers, What should the transfer price for the component be set at so that division managers acting in their own divisions' best interests take actions that are in the best interest of the company as a whole? The transfer price should be set