Solution 1a:
If Audio Division is currently selling only 53,000 speaker each
year to outside customers at the stated $41 price, it means
division is having spare capacity of 9000 speaker.
Lowest acceptable transfer price from the perspective of the
audio Division = Variable cost per speaker
= $17
Solution 1b:
Highest acceptable transfer price from the perspective of the Hi-fi
Division = marker price from outside supplier = $35 per speaker
Solution 1c:
Range of acceptable transfer prices (if any) between the two
divisions = $17 to $35
Yes, the managers of the Audio and Hi-fi Divisions likely to voluntarily agree to a transfer price for 9,000 speakers.
Solution 1d:
Yes, from stand point of company also, this transfer should take
place.
Solution 2a:
If Audio Division can sell all of its speaker to outside customers
for $41 per speaker, lowest acceptable transfer price from the
perspective of the audio Division = selling price i.e. $41 per
speaker
Solution 2b:
Highest acceptable transfer price from the perspective of the Hi-fi
Division = marker price from outside supplier = $35 per speaker
Solution 2c:
Range of acceptable transfer prices (if any) between the two
divisions = Range of acceptable transfer price cannot be
established. (as lowest acceptable transfer price for audio
division is higher than highest acceptable transfer price of Hifi
division)
Manager of Audiot and Hi -fi division is not likely to voluntarily
agree to a transfer price for 9,000 speakers.
Solution 2d:
From stand point of the entire company also, this transfer should
not take place.
Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products....
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: Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity Capacity in units 41 17 62,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year. It has received a quote of...
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 Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units 55,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year It has received a quote of $33 per...
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: Selling price per unit on the intermediate market $ 45 Variable costs per unit $ 20 Fixed costs per unit (based on capacity) $ 7 Capacity in units 59,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 8,000 speakers per year. It has...
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: Selling price per unit on the intermediate market $ 42 Variable costs per unit $ 16 Fixed costs per unit (based on capacity) $ 7 Capacity in units 63,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 12,000 speakers per year. It has...
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: Selling price per unit on the intermediate market $ 40 Variable costs per unit $ 20 Fixed costs per unit (based on capacity) $ 6 Capacity in units 56,000 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...
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 Selling price per unit on the intermediate market Variable costs per unit Pixed costs per unit (based on capacity) Capacity in units 64,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 9,000 speakers per year. It has received a quote of $37 per...
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: Selling price per unit on the intermediate market $ 44 Variable costs per unit $ 18 Fixed costs per unit (based on capacity) $ 7 Capacity in units 60,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 12,000 speakers per year. It has...
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: Selling price per unit on the intermediate market $ 43 Variable costs per unit $ 20 Fixed costs per unit (based on capacity) $ 6 Capacity in units 59,000 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...
Exercise 11-3 (Static) Transfer Pricing Basics (LO11-3] 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: Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units A A A 60 42 8 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will...
Exercise 11-3 (Static) Transfer Pricing Basics [LO11-3] 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: Selling price per unit on the intermediate market $ 60 Variable costs per unit $ 42 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will...