Question: Chapter T1A 6 Help Save &Ei Submit 2 Exercise 11A-2 Transfer Pricing from the Viewpoint of the Entire Company [LO11-5 Division A manufactures electronic circuit
Chapter T1A 6 Help Save &Ei Submit 2 Exercise 11A-2 Transfer Pricing from the Viewpoint of the Entire Company [LO11-5 Division A manufactures electronic circuit boards. The boards can be sold ether to Division 8 of the same company or to outside customers. Last year, the following activity occurred in Division A Variable eost per circuit beard 114 Sales to Division B were at the same price as sales to outside customers The cirfuit boards purchased by Division 8 were . used in an electronic instrument manufactured by that division (one board per instrument Division B incurred $250 in additional variable cost per instrument and then sold the instruments for $630 each 1 Prepare income statements for Division A. Division B and the company as a whole boards from Division A rather than 5900 (Circuit boards of this type are not availisble from outside sources.) From the standpoint of the company as a whole, should Division A sell the additional 1,000 circuit boards to Division B or continue to sell them to outside customers? Complete this question by entering your answers in the tabs below. Required Required 2
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