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Division, which is operating at 50% of capacity, will put the fitting into a brake unit it produces and sells to an airplane manufacturec. The cost of the brake unit being built by the Brake Division follows: Although the Brake Division's proposed price of $7.60 for the 52 fitting is well below the Electrical Division's regular price of $9.60, the manager of the Brake Division believes the price concession is necessary for his division to win the contract for the airplane brake units. He has heard "through the grapevine" the airplane manufacturer will reject his bid if it is more than $57 per brake unit. Thus, if the Brake Division is forced to pay the regular $9.60 price for the 52 fitting, it will either not get the contract or suffer a substantial loss. The manager of the Brake Division believes the price concession benefits his division and the company as a whole. Weller Industries uses return on investment (ROI) to measure divisional performance. Required: 1. Assume that you are the manager of the Electrical Division: a. What is the lowest acceptable transfer price for the Electrical Division? b. Would you supply the X52 fitting to the Brake Division for $7.60 each as requested? 2. Assuming the airplane brakes can be sold for $57, what is the financial advantage (disadvantage) for the company (on a per-unit basis) if the Electrical Division supplies fittungs to the Brake Division? 3. In principle, within what range would the fransfer price lie? Note: For all requirements, enter your "Financial Disadvantage" amounts as a negative value and round your final answers to 2 decimal places

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