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would you please make sure that the answers are correct. i don't know why but almost all of the answer that i got from chegg
would you please make sure that the answers are correct. i don't know why but almost all of the answer that i got from chegg are wrong. thanks
Check work my 4 Problem 11A-6 Basic Transfer Pricing [LO11-5) Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's retum on investment (ROl). Assume the following information relative to the two divisions: nts Alpha Division Capacity in units Nunber of units now being sold to eBook 1e5,eee 2a5,eee 81, 2s,eee 43 56,8ee 283,eee outside custoners selling price per unit to outside 56,8ee 288,eee 44 $ 24 182 customers Variable costs per unit Fixed costs per unit (based on 66 $ 40 $ Print 64 $ 27 capacity) 24 Beta Division: 19,8 56,e9e Nunber of units needed annually price now being paid to 9,8 74,eee an outside supplier 94 S 41 66+ Before any purchase discount. Managers are free to decide if they will participate in any internal transfers. All transfer prices are negotiated. Required: 1. Refer to case 1 shown above. Alpha Division can avoid $5 per unit in commissions on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? C. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $6 per unit in shipping costs on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? C. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisionel menegers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 74,000 units to Beta Division for $40 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 6% price discount from the outside supplier a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? c. 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 19,000 units from Alpha Division at $5704 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? 4. Refer to case 4 shown above. Assume that Bete Division wents Alpha Division to provide it with 56,000 units of a different product from the one Alpha Division is producing now. The new product would require $21 per unit in variable costs and would require that Alpha Division cut back production of its present product by 28,000 units annually. What is the lowest acceptable transfer price from Alpha Division's perspective? Complete this question by entering your answers in the tabs below Req 1A to 1C Req 2A to 2D Req 3A to 3D Req 4 1. Refer to case 1 shown above. Alpha Division can avoid $5 per unit in commissions on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to transfer? Show les Identify the lowest and highest acceptable transfer prices Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any) There is not a range of acceptable transfer prices Check work my 4 Problem 11A-6 Basic Transfer Pricing [LO11-5) Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division's retum on investment (ROl). Assume the following information relative to the two divisions: nts Alpha Division Capacity in units Nunber of units now being sold to eBook 1e5,eee 2a5,eee 81, 2s,eee 43 56,8ee 283,eee outside custoners selling price per unit to outside 56,8ee 288,eee 44 $ 24 182 customers Variable costs per unit Fixed costs per unit (based on 66 $ 40 $ Print 64 $ 27 capacity) 24 Beta Division: 19,8 56,e9e Nunber of units needed annually price now being paid to 9,8 74,eee an outside supplier 94 S 41 66+ Before any purchase discount. Managers are free to decide if they will participate in any internal transfers. All transfer prices are negotiated. Required: 1. Refer to case 1 shown above. Alpha Division can avoid $5 per unit in commissions on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? C. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to a transfer? 2. Refer to case 2 shown above. A study indicates that Alpha Division can avoid $6 per unit in shipping costs on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? C. What is the range of acceptable transfer prices (if any) between the two divisions? Would you expect any disagreement between the two divisionel menegers over what the exact transfer price should be? d. Assume Alpha Division offers to sell 74,000 units to Beta Division for $40 per unit and that Beta Division refuses this price. What will be the loss in potential profits for the company as a whole? 3. Refer to case 3 shown above. Assume that Beta Division is now receiving an 6% price discount from the outside supplier a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? c. 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 19,000 units from Alpha Division at $5704 per unit. If Alpha Division accepts this price, would you expect its ROI to increase, decrease, or remain unchanged? 4. Refer to case 4 shown above. Assume that Bete Division wents Alpha Division to provide it with 56,000 units of a different product from the one Alpha Division is producing now. The new product would require $21 per unit in variable costs and would require that Alpha Division cut back production of its present product by 28,000 units annually. What is the lowest acceptable transfer price from Alpha Division's perspective? Complete this question by entering your answers in the tabs below Req 1A to 1C Req 2A to 2D Req 3A to 3D Req 4 1. Refer to case 1 shown above. Alpha Division can avoid $5 per unit in commissions on any sales to Beta Division. a. What is the lowest acceptable transfer price from the perspective of the Alpha Division? b. What is the highest acceptable transfer price from the perspective of the Beta Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? Will the managers probably agree to transfer? Show les Identify the lowest and highest acceptable transfer prices Lowest acceptable transfer price Highest acceptable transfer price Identify the range of acceptable transfer prices (if any) There is not a range of acceptable transfer pricesStep by Step Solution
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