Question: Under the general transfer pricing guideline the minimum transfer price will
“Under the general transfer-pricing guideline, the minimum transfer price will vary depending on whether or not the supplying division has idle capacity.” Do you agree? Explain.
Answer to relevant QuestionsWhy should managers consider income tax issues when choosing a transfer-pricing method? User Friendly Computer Inc., with headquarters in Nepean, Ontario, manufactures and sells a premium desktop computer system. User Friendly has three divisions, each of which is located in a different country: a. China ...Refer to Exercise 23-25. Assume that Division A can sell the 1,000 units to other customers at $155 per unit, with variable market ing cost of $5 per unit. IN 23-25 The Allison-Chambers Corporation, manufacturer of tractors ...A company has two divisions. The Bottle Division produces products that have variable costs of $3 per unit. Its 2012 sales were 150,000 to outsiders at $5 per unit and 40,000 units to the Mixing Division at 140 percent of ...Return on investment (ROI) is often expressed as follows: REQUIRED 1. What advantages are there in the breakdown of the computation into two separate components? 2. Fill in the following blanks: After filling in the blanks, ...
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