Question: Scenario: Division X ( capacity 3 0 , 0 0 0 units ) : VC = Tk . 1 0 0 / unit , selling

Scenario: Division X (capacity 30,000 units): VC = Tk.100/unit, selling price = Tk.150. Division Y needs 10,000 units; external purchase price = Tk.150. Division X already sells 25,000 units externally. Required: a) What is the minimum transfer price X should charge? b) Should transfer happen at Tk.120? Justify. c) How would a dual rate transfer pricing system solve internal conflicts?

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Accounting Questions!

Q:

Only do (d), where the profit reports are shown. Especially the wrong (red) answers. At a recent board meeting of the Grayson Manufacturing Company, several individuals in attendance expressed...

Q:

Caribbean Manufacturers Ltd (CML) wants to invest in a new machine to start producing cocoa chips. The purchase price of the new machine is $6,750,000 which will have an economic life of ve years. A...

Q:

please complete sheets 7-11 attached bellow are supporting information for questions A1 X fx E B D 15 Division N has decided to develop its budget based upon projected sales of 33,000 lamps at 16...

Q:

How do you figure out the Data changes in each Table?? Especially in Scenario Analysis (rows 107-109), this table will change with Worst Base Best Cases. I just need some more help on this. Since you...

Q:

Would you please help me with the MC? ACCOUNTING 203 ON-LINE EXAM #2 (Chs. 17,18,19) Individual Portion 90 pts. 30 Multiple-Choice 3 pts. each (Please highlight your answers in yellow) 1. The costs...

Q:

3. Golden Company sells its product for $42 per unit. The companys unit product cost based on the full capacity of 400,000 units is as follows: Direct materials $ 8 Direct labor 10 Manufacturing...

Q:

if you know solve it if you do not know close the question. Problem HydroHappy management wants to examine the profitability of its small retail shop near the beach in St. Thomas, Virgin Islands. The...

Q:

You will complete a financial planning model that is derived from a set of assumptions and link together statements of projected cash, income and balance sheets that articulate. An Excel template,...

Q:

[The following information applies to the questions displayed below.) At a recent board meeting of the Grayson Manufacturing Company, several individuals in attendance expressed concern that they...

Q:

Tokyo Company is a producer and distributor of various motorized recreational scooter, bike and motorcycle products. The Osaka division handles scooters and would like to earn a long-run rate of...

Q:

a. Why did options trading fall into disrepute in the United States during the early de cades of the twentieth century? b. What was the SECs original stance towards options trading? c. What was the...

Q:

1. 25, 22, 18, 35, 37, 34, 31, 36, 36, 36, 33, 33, 30, 30, 26, 26, 26. Draw the histogram for these data using an initial class boundary of 17.5, an ending class boundary of 37.5, and 5 classes of...

Q:

Which of the following is not an asset? Group of answer choices Retained earnings Accumulated depreciation Prepaid expenses Equipment Cash

Q:

Q What is the function of anti-pumping in the circuit breaker?