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The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets.

The Slate Company manufactures and sells television sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at capacity, incurs an incremental manufacturing cost of $65 per screen. The SD can sell all its output to the outside market at a price of $96 per screen, after incuming a variable marketing and distribution cost of $5 per screen. If the AD purchases screens from outside suppliers at a price of $95 per screen, it will incur a variable purchasing cost of $5 per screen Sale's division managers can act autonomously to maximize their own division's operating income. Read the requirements Requirement 1. What is the minimum transfer price at which the SD manager would be willing to sell screens to the AD? Incremental cost per screen Opportunity cost per screen Minimum transfer price 65 Requirement 2. What is the maximum transfer price at which the AD manager would be willing to purchase screens from the 50? Purchasing cost per screen $ Outside market price per screen Maximum transfer price 100 Requirement 3. Now suppose that the SD can sell only 80% of its output capacity of 10,000 screens per month on the open market Capacity cannot be reduced in the short run. The AD can assemble and sell more than 10,000 TV sets per month a. What is the minimum transfer price at which the SD manager would be willing to sel screens to the AD? (Select the group(s) of units and enter the minimum transfer price for each group) Units 2,000 units 0.000 units Minimum transfer price 100 00

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