Do not give image format Required information[The following information applies to the questions displayed below.]In each of the cases below, assume Division X has a product that can be sold to outside customers or toDivision Y of the same company. The managers of the divisions are evaluated based on their divisionalprofits.Division X:Capacity in unitsNumber of units being sold to outsidecustomersSelling price per unit to outsidecustomersVariable costs per unitFixed costs per unit (based oncapacity)Division Y:Number of units needed for productionPurchase price per unit now beingpaid to an outside supplierRequired Required2A2BRequired:2. Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompanysales.Required2CAa. What is the lowest acceptable transfer price from the perspective of the selling division?b. What is the highest acceptable transfer price from the perspective of the buying division?c. What is the range of acceptable transfer prices (if any) between the two divisions? If the managers are free tonegotiate and make decisions on their own, will a transfer probably take place?CaseComplete this question by entering your answers the tabs below.Identify the range of acceptable transfer prices (if any):OThere is not a range of acceptable transfer prices.There is a range of acceptable transfer prices as shownbelow:sTransferpriceSAre the managers likely to agree on a transfer price?OYesONOB92,000 101,00092,00080,000$ 59$ 29$ 23$ 15$8$421,00021,000$ 51$ 30< Required 2BWhat is the range of acceptable transfer prices (if any) between the two divisions? If themanagers are free to negotiate and make decisions on their own, will a transfer probablytake place?Required 2C >Show less

Lowest acceptable transfer price for selling division if there is excess capacity = Variable cost…

Division Y of the same company. The managers of the divisions are evaluated based on their divisional profits. Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) Division Y: Number of units needed for production Purchase price per unit now being paid to an outside supplier Case A 92,000 101,000 92,000 80,000 $ 59 $29 $ 23 $ 15 $8 $4 B 21,000 $ 51 21,000 $ 30

Division Y of the same company. The managers of the divisions are evaluated based on their divisional profits. Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers Variable costs per unit Fixed costs per unit (based on capacity) Division Y: Number of units needed for production Purchase price per unit now being paid to an outside supplier Case A 92,000 101,000 92,000 80,000 $ 59 $29 $ 23 $ 15 $8 $4 B 21,000 $ 51 21,000 $ 30

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter13: The Balanced Scorecard: Strategic-based Control

Section: Chapter Questions

Problem 7E: Consider the following list of scorecard measures: a. Product profitability b. Ratings from customer...

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