Course Content $/$ Module $24$

$/$ Module $24-$ Segment Reporting, Transfer Pricing, and The Balanced Scorecard

Module $24-$ Segment Reporting, Transfer Pricing, and The Balanced Scorecard

Appropriate Transfer Prices: Opportunity Costs

Plains Peanut Butter Company recently acquired a peanut$-$processing company that has a normal annual capacity of $4,000,000$ pounds and that sold $2,800,000$ pounds last year at a price of $$2\mathrm{.}00$ per pound. The purpose of the acquisition is to furnish peanuts for the peanut butter plant, which needs $1,600,000$ pounds of peanuts per year. It has been purchasing peanuts from suppliers at the market price. Production costs per pound of the peanut$-$processing company are as follows:

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