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General guideline, transfer pricing. The Slate Company manufactures and sells television 22-26 sets. Its assembly division (AD) buys television screens from the screen division (SD) and assembles the TV sets. The SD, which is operating at capacity, incurs an increm manufacturing cost of $65 per screen. The SD can sell all its output to the outside market at a of $100 per screen, after incurring a variable marketing and distribution cost of s8 per the AD purchases screens from outside suppliers at a price of $100 per screen, variable purchasing cost of $7 per screen. Slate's division managers can act a maximize their own division's operating income. price screen. If it will incur a Required: 1. Wh minimum transfer price at which the SD manager would be willing to at is the se screens to the AD? 2. What is the maximum transfer price at which the AD manager would be willing to purchase screens from the SD? Now suppose that th eSD can sell only 70% of its output capacity of 20,000 screens per month mble and 3. on the open market. Capacity cannot be reduced in the short run. The AD can asse sell more than 20,000 TV sets per month. a. Wha the minimum transfer price at which the SD manager would be willing to sell t is terhe roirnhe f view of Sliate's management, bow much of the SD ouiput should be c. If Slate mandates the SD and AD managers to "split the difference" on the minimum and maximum transfer prices they would be willing to negotiate over, what would be the resulting transfer price? Does this price achieve the outcome desired in requirement 3b? screens to the AD? b. rom thnt of view of Slate's transferred to the AD

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