would you please make sure that the answers are correct. i don\'t know why but a
ID: 2584627 • Letter: W
Question
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 my work Exercise 11A-1 Transfer Pricing Basics [LO11-5] Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: pped Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units 46 19 59,000 ook Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 10,000 speakers per year. It has received a quote of $38 per speaker from another manufacturer. Sako Company int evaluates division managers on the basis of divisional profits Required 1. Assume the Audio Division is now selling only 49,000 speakers per year to outside customers a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi . Division? rint .b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the ences Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Division is selling all of the speakers it can produce to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired from the Audio Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate without interference, would you expect the division managers to voluntarily agree to the transfer of 10,000 speakers from the Audio Division to the Hi-Fi Division? d. From the standpoint of the entire company, should the transfer take place? Complete this question by entering your answers in the tabs below Req 1A Req 1B Req 1C Req 1D Req 2A Req 2B Req 2C Req 2D From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division Assume the Audio Division is now selling only 49,000 speakers per year to outside customers est acceptable transfer price Req 1A Req 1B >Explanation / Answer
As there will cost saving of $19
if purcased from outside $38
if purchased fro division $19
Saving in Cost $19
Number Particulars Lowest Acceptable Transfer Price Highest Acceptable Transfer Price Reason 1A From the Stand point of Audio Division ,If Audio division is selling only 49000 units Variable Cost i.e. $19 SInce Audio Division is having spare capacity of 10000 units so Transfer Price that will be charged from HI-Fi division will be variable cost only. Fixed Cost is ignored as it will continue to occur even if not sold to anyone. 1B From the Stand point of HI-Fi division $38 Hi-fi division will like to paid Price at which hi-fi division can purchase the speakers from outside market 1C Acceptable Tranfer Price Range $19 - $ 38 In the given range if division managers are left free to negotiate without interference Yes division managers will voluntary agree to the tranfer price 1D From the Stand point of company tranfer should take placeAs there will cost saving of $19
if purcased from outside $38
if purchased fro division $19
Saving in Cost $19
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.