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2 10 points Division A and Division B are divisions within the same company. The...

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Accounting

2 10 points Division A and Division B are divisions within the same company. The managers of both divisions are evaluated based on their division's return on investment (ROE). Assume the following information relative to two divisions Division A Capacity in units 160,000 Numbers of units now being sold to outside customers 160,000 Selling price per unit to outside customers $76 Variable costs per unit $46 Fixed cost per unit (based on capacity) $20 15,000 $75 Division Number of units needed annually Purchase price now being paid to an outside supplier 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 Ay 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 15,000 units to Division B for $74 and that Division B refuses this price. What will be the loss in potential profits for the company as a while? For the toolbar, press ALT+F10 (PC) or ALT-FN-F10 (Mac) ALI XQ sc BIUS Paragraph XX, Arial 10pt

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