Ellie Jackson is upset by the new transfer pricing system recently implemented at Monson Company. As manager of the first of three sequential production departments, she can't see the value of a transfer pricing system for her department. "We can't sell what we produce to any outside buyer. And we're never pushed for capacity, so I don't think transfer pricing will do anything but make my life more complicated." You are Ellie's boss.   Required:   Explain how transfer pricing can help Ellie evaluate her department's operations and allow you to more effectively evaluate her management abilities.

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2. University Students have a choice of living in residence at the university or in private accommodation. The demand for university residence is shown below. The university has 1100 spaces at $200 each, per week, and cannot build more accommodation in the short run. Price per week (S) 300 280 260 240 220 210 200 190 180 Number of students per week 300 420 500 580 650 800 1200 1600 2000 a. What problem results from the current pricing policy? b. How can the problem be solved? c. Estimate the market-clearing price. d. Suppose now that prices from private accommodation and transportation increase, while the prices of university rooms remain unchained. How will these price increases affect demand for university accommodation?

Alar is a manager at Shoeless Joe's Sports Bar and Grill and was approached by a hockey team asking for sponsorship. Sponsorship would mean purchasing 18 jerseys for the team BUT would see the team visit the restaurant on a regular basis. • The EXPECTED RETURNS for the restaurant from these visits would be Gross Sales of $2,000 per year for an expected five years. (Assume the restaurants profit margin on food/alcohol sales is 40%, so USE NET PROFIT of $800 per year for all calculations). Further, the jerseys would have the Shoeless Joe's logo and act as advertising (a goodwill function in accounting), BUT this is not considered in the calculations. Alar remembers something about CLTV in college and wants to calculate the CLTV using different methods on ONLY the future expected business from the team ($800 per year) (ignore advertising or goodwill from the jerseys). Determine: a) The CLTV of the team for "five years" using the "Easy Method". b) The CLTV of the team using the "Simple…