Question: Moving to another question will save this response Question 2 Division A and Division B are divisions within the same company. The managers of
Moving to another question will save this response Question 2 Division A and Division B are divisions within the same company. The managers of both divisions are evaluated bend on their division's return on (0) Assume the following Information relative to two divisions Divalen A Capacity in units Numbers of units now being sold to antide customers Setting price per unit to outside customers Viciable costs per unit Fixed cost per unit (based on capacity) Division Number of units needed annually Purchase price now being paid to an outvide supplier 150,000 190,000 $75 545 $20 20,000 573 A study indicates that Division A can avoid $5 per unit in shipping costs on any sales to Division B. Required: Compute the following 1. Calculate the lowest acceptable transfer price for the seller (Division A)? 2. Calculate the highest acceptable transfer price for the buyer (Division By? 3. Calculate the range of acceptable transfer prices between the two divisions? 4. Assume Division A offers to sell 20,000 units to Division B for $72 and that Division B refuses this price. What will be the loss in potential profits for the company as a whole For the toolbar, press ALT+F10 (PC) or ALT-FN+F10 (Mac). Times 12pt
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