Transcribed image text: Sellin Varalle Fixed cos Alpha and Bets are divisions within the same company. The managers of both divisions are evaluated based on their own elvion's return on investment (RON). Assume the following information relative to the two divisions: Case Alpha Division: Capacity in units 57. 185,80 195,000 Nuber of units now being sold to outside customers 57.000 79,00 195,00 price per unit to outside Customers $ 103 costs per unit $ 25 $30 ixed costs per unit (based on Capacity) $ 29 $ 12 $ 21 Beta Number of units needed annually 10,50 70,00 23,00 54,800 Purchase price now being paid to an outside supplier $95 $44 "Before any purchase discount Required: 1. Refer to case 1 shown above. Alphs Division can avoid $5 per unit in commissions on any sales to Bets Division . What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices (if any between the two divisions? Will the maingers probably agree to transfer? 2 Refer to csse 2 shown above. A study indicates that Alpha Division can avoid $4 per unit in shipping costs on any sales to Bets Division .. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices any between the tive divisions: Would you expect sny disagreement between the tive divisional managers over what the exact transfer price should be d. Assume Alpha Division offers to sell 70.000 units to Bets Division for $43 per unit and that Beta Division refuses this price. What wil be the loss in potential profits for the company as a whole? 3. Refer to case 3 shown above. Assume that Bets Division is now receiving an 4% price discount from the outside supplier .. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices any between the tive divisions? Will the managers probably agree to transfer: d. Assume Bets Division offers to purchase 23.000 units from Alphs Division st $56.44 per unit. If Alpha Division accepts this price, would you expect ROI to incresse, decresce, or remain unchanged 4. Refer to case 4 shown above. Assume that Bets Division wants Alpha Division to provide it with 64,000 units of different product from the one Alpha Division is producing now. The new product would require 826 per unit in variable costs and would require that Alpha Division cut back production of its present product by 32,000 units annually. What is Alpha Division's lowest acceptable transfer price? Complete this question by entering your answers in the tabs below. 1 to 10 Reg 2 to 20 R 3A 10 3D R+ 1. Refer to case 1 shown above. Alpha Division can avoid $5 per unit incommissions on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable Vansfer price s se Highest acceptable transfer price s 96 Identify the range of scooptable transfer prices (fany There is not a range of acceptable transfer prices Othere is a range of acceptable transfer prices as shown below. 5 Transfer price Wil the managers agree to the trade? Yes No Alpha and Bets are visions within the same company. The managers of both divisions are evaluated based on their own divisions return on investment (ROI). Assume the following information relative to the two divisions: capacity Alpha Division Capacity in units 57,00 125.00 195,00 Nuber of units now being sold to outside customer's 57,200 282,200 195.000 Selling price per unit to outside Customs $45 $ Variable costs per unit $41 $ 30 Fixed costs per wit (based on $ 29 $ 12 $ 21 Buta Division Nuber of units needed annually 10, 78,000 23.00 54,600 Purchase price now being paid to an outside Supplier $95 $ "Before any purchase discount Required: 1. Refer to cre 1 shown above. Alphs Division can avoid $5 per unit in commissions on any sales to Bets Division .. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices and between the two divisions? Will the managers probably agree to transfer? 2 Refer to care 2 shown above. A study indicates that Alphs Dision can avoid $4 per unit in shipping costs on any sales to Bets Division .. What is Alpha Division's lowest acceptable transfer price? b. What is Bets Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices of any between the tive divisions: Would you expect sny disagreement between the tive divisional managers over what the exact transfer price should be d. Assume Alpha Division offers to sell 70,000 units to Bets Division for $43 per unit and that Beta Division refuses this price. What wil be the loss in potential profits for the company ss whole? 3. Refer to case 3 shown above. Assume that Bets Division is now receiving an 4% price discount from the outside supplier .. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices any between the tive divisions? Will the managers probably agree to transfer d. Assume Bets Division offers to purchase 23.000 units from Alphs Division st $56.44 per unit. If Alpha Division accepts this price, would you expects ROI to incresse, decresse, or remain unchanged 4. Refer to case 4 shown above. Assume that Bets Division wants Alpha Division to provide it with 64000 units of different product from the one Alpha Division is producing now. The new product would require $26 per unit In verisble costs and would require that Alpha Division cut back production of its present product by 32,000 units annually. What is Alphe Division's lowest acceptable transfer price? Complete this question by entering your answers in the tabs below. 1 to 10 Req 24 to 203 10 3D R4 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $4 per unit in shipping costs on any sales to Beta Division a. What is Alpha Division's lowest acceptable transfer price? h. What Beta Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisional managers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 70,000 units to Beta Division for $43 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? Show less Identify the lowest and highest acceptable transfer prices: Lowest cooptable transfer price $ 41 Highest able transfer price $ 44 Identity the range of acceptable transfer prices (fany! There is not a range of acceptable transfer prices There is a range of acceptable transfer prices as shown below. Transfer price 5 Wil the managers agree to the trade? Yes ONA Loss in potential profits for the company Alphs and Bets are clvisions within the same company. The managers of both divisions are evaluated based on their own clvision's return on investment (ROI). Assume the following information relative to the two divisions: $ 21 1 2 4 Alpha Division Capacity in units 57, aas, 195,000 Nuber of units now being sold to outside customers 57, 195,00 Selling price per unit to outside customers $ 103 $45 Variable costs per unit $25 $41 Fixed costs per unit (based on capacity) $ 29 $ 12 Beta Division Mauber of units needed annually 18,500 70,000 $4,000 Purchase price now being paid to an outside Supplier $95 $44 "Before any purchase discount Required: 1. Refer to cre shown above.Alphs Division can evold $5 per unit in commissions on any sales to Bets Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of acceptable transfer prices on between the two dicions? Will the managers probably agree to transfer? 2 Refer to core 2 shown above. A study indicates thet Alphs Dision can avoid $4 per unit in shipping costs on any sales to Bets Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price! c. What is the range of scceptable transfer prices of any between the two divisions? Would you expect sny disagreement between the two divisional managers over what the exact transfer price should be d. Assume Alpha Division offers to sell 70,000 units to Bets Division for $43 per unit and that Bete Division refuses this price. What will be the loss in potential profits for the company 35 whole! 3. Refer to case 3 shown above. Assume that Bets Division is now receiving an 4 price discount from the outside supplier a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? c. What is the range of scceptable transfer prices of any between the two divisions? Will the managers probably agree to transfer d. Assume Bets Division offers to purchase 23.000 units from Alphs Division st $56.44 per unit. If Alpha Division accepts this price, would you expect ROI to incresse, decresse, or remain unchanged? 4. Refer to case 4 shown above. Assume that Bets Division wants Alpha Division to provide it with 64,000 units of different product from the one Alpha Division is producing now. The new product would require S25 per unit In verible costs and would require that Alpha Division cut back production of its present product by 32,000 units annually. What is Alpha Division's lowest acceptable transfer price! Complete this question by entering your answers in the tabs below. 1A L 1C Reg 24 to 2034 3D Reg4 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 4% price discount from the outside supplier. a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Division's highest acceptable transfer price? What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer d. Assume Beta Division offers to purchase 23,000 units from Alpha Division at $56.44 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? (Round your fins answers to 2 decimal places.) Show less Identify the lowest and highest acceptable transfer prices: Lowest acceptable transfer price Highest acceptable transfer price Identity the range of cooptable transfer prices (fany There is not a range of acceptable transfer prices There is a range of acceptable transfer prices as shown below. Transfer price 5 Wil the managers agree to the trade? ONO Division A's ROI should Incrosse Deresse Alpha and Bets are divisions within the same company. The managers of both divisions are evaluated based on their own avison's return on investment (ROI). Assume the following information relative to the two divisions: Case Alpha Division Capacity in units 57, 22.6 125,00 Nuber of units now being sold to outside customers 57,00 79,00 195,000 Selling price per unit to outside customers $ 103 $45 Variable costs per unit $25 $30 Fixed costs por uit (based on capacity) $ 29 $ 21 Beta Division Nuber of units neededly 18,500 70,000 23,00 Purchase price na being paid to an outside supplier $ 95 "Before sny purchase discount Required: 1. Refer to cre 1 shown above. Alphs Division can avoid $5 per unit in commissions on any sales to Bets Division a. What is Alpha Division's lowest acceptable transfer price? b. What is Beta Don's highest acceptable transfer price? c. What is the range of scceptable transfer prices (if any between the two diloWill the managers probably agree to transfer? 2 Refer to care 2 shown above. A study indicates that Alphs Dision can avoid $4 per unit in shipping costs on any sales to Bets Division .. What is Alpha Division's lowest acceptable transfer price? b. What is Bets Don's highest acceptable transfer price? c. What is the range of scceptable transfer prices of any between the tradicion? Would you expect sny desgreement between the two divisional managers over what the exact transfer price should be d. Assume Alpha Division offers to sell 70,000 units to Bets Division for $43 per unit and that Beta Division refuses this price. What wil be the loss in potential profits for the company whole! 3. Refer to case 3 shown above. Assume that Bets Division is now receiving an 4% price discount from the outside supplier a. What is Alpha Division's lowest acceptable transfer price? b. What Is Bets Don's highest acceptable transfer price? What is the range of scceptable transfer prices of any between the two sons? Will the managers probably agree to transfer? d. Assume Bets Division offers to purchase 23.000 units from Alphs Division st $56.44 per unit If Alpha Division accepts this price would you expects Rol to incresse, decresce, or remain unchanged 4. Refer to case 4 shown above. Assume that Bets Division wants Alpha Division to provide it with 64,000 units of different product from the one Alpha Division is producing now. The new product would require S26 per unit In verible costs and would require that Alpha Division cut back production of its present product by 32,000 units annually. What is Alpha Division's lowest acceptable transfer price? Complete this question by entering your answers in the tabs below. R 1A 10 10 Reg 24 to 20 43 10 3D R+ Refer to cause 4 shown above. Assume that Beta Division wants Alpha Division to provide it with 64,000 units of a different product from the one Alpha Division is producing now. The new product would require $26 per unit in variable costs and would require that Alpha Division out back production of its present product by 32,000 units annually. What is Alpha Division's lowest acceptable transfer price? Show less Lowest acceptable transfer price