Question

Sako Companys Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data
YUUEEL VE E PUU UJU d. From the standpoint of the entire company, should the transfer take place? 2. Assume the Audio Divisio
c. What is the range of acceptable trarisiei picUS (u dry) Letween I WU UVIJIULIU. ILILIUU IU HUYUUU M UUM you expect the div
b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired Pom the Aud
d. From the standpunt Ulule erie Lumipally, IUUIU WUNDU UN PICUT 2. Assume the Audio Division is selling all of the speakers
اليه ، ساعده وعم ، سه وعدو امية مه به و نمره بده مه به به به ده مده منه امه ي م و به ۹ مه يه مع b. From the standpoint of the
Homework و دووه میده به همه ی مه و به او فيه مد میمه وه و به به و ام و به وقه و همه مه بوو مه مه و بویه به بوفه ... b. From t
UPVISUUS b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers acquired fr
Division? c. What is the range of acceptable transfer prices (if any) between the two divisions? If left free to negotiate wi
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Answer #1

1.Spare capacity = 9000 units

a.Lowest acceptable transfer price for Audio division= Variable cost per unit

= $19

b.Highest acceptable transfer price is equal to the price paid to outside manufacturer = $37 per unit

c.Acceptable range = $19-$37

Yes, they will agree

d.Yes

2.a.No Spare capacity

a.Lowest acceptable transfer price is equal to the market price i.e. $48 per unit

b.Highest acceptable transfer price is equal to the price paid to outside manufacturer = $37 per unit

c.No acceptable range

No, will not agree

d.No, should not take place

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