Ute Semi-Conductor Company Problem #1 Ute Semi-conductor superchips superchips External market Superchip Variable cost $230 Selling price $400 Market Demand 20,000 Hours/unit to produce 4 Max 25K Ute Mini-computer Production capacity of semi-conductor = 100,000 hours Ute has a 100% owned subsidiary that wants to purchase super chips. What should Ute establish as the Transfer Price Poicy under the Optimum Transfer Pricing method? 2

Ute Semi-Conductor Company Problem #1 Ute Semi-conductor superchips superchips External market Superchip Variable cost $230 Selling price $400 Market Demand 20,000 Hours/unit to produce 4 Max 25K Ute Mini-computer Production capacity of semi-conductor = 100,000 hours Ute has a 100% owned subsidiary that wants to purchase super chips. What should Ute establish as the Transfer Price Poicy under the Optimum Transfer Pricing method? 2

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter10: Decentralization: Responsibility Accounting, Performance Evaluation, And Transfer Pricing

Section: Chapter Questions

Problem 5CE

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Subsidiary Manufactured Part Motor Glass turntable Door Subsidiary Manufactured Part Motor Glass turntable Existing External Market Yes Door No Yes Llikey to be Transferred Internally Yes v Yes v Can Sell Externally for This Price: No $30 N/A 8 Internal Variable Cost $25 20 5 Which of these parts will likely be transferred internally, thereby giving rise to an internal transfer price? Which of these parts will ne likely be transferred internally? Internal Absorption Cost $28 25 7 Purchase Externally for This Price $24 N/A 8
Question 2
Chapter 6 Uniform Señes Analysisy Acertain 'ndustrial firm desires an economic analysis to detemine which of twodifferent machine should be purechased. Each machine s capable of performing the same task given amount of Hime . Assume the minimum attactiverate od returnMARR) is 8%. The following data are to beüsedin your anaylsis Machine X Machine Y First cost $ 5000.00 $8000,00 $150.00 $2000.00 Annual Manitenance Cost $00.00 Salvage value Es timated life inyear which machine would youchoo se? Base your answer on annual.cost Pravide cash flow diagrams and Showyour work? $00.00 12 i50 150 ISo 15. 150 IS. 15a 15. İso 1 2000. 150 ISo A A 5 6 7 la 12
Exercise 11-3 (Algo) Transfer Pricing Basics [LO11-3] Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 120 Variable costs per unit $ 102 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $117 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: 1. Assume the Audio Division sells only 20,000 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers…
Exercise 11-3 (Algo) Transfer Pricing Basics [LO11-3] Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 120 Variable costs per unit $ 102 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will need 5,000 speakers per year. It has received a quote of $117 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: 1. Assume the Audio Division sells only 20,000 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers…
A2
1. The Selling Division’s unit sales price is P20 and its unit variable cost is P8. Its capacity is 10,000 units. Fixed costs per unit are P4. Current outside sales is 10,000 units. What is the minimum transfer price that the Selling Division would be willing to accept if 3,000 units will be sold to the Purchasing Division? Assume that the Purchasing Division can buy the same from outside market at P18.50. _____________________2. The Selling Division’s unit sales price is P20 and its unit variable cost is P8. Its capacity is 10,000 units. Fixed costs per unit are P4. Current outside sales are 7,000 units. What is the Selling Division’s opportunity cost per unit from selling 3,000 units to the Purchasing Division? Assume that the Purchasing Division can buy the same from outside market at P18.50 ______________________3. The Selling Division’s unit sales price is P20 and its unit variable cost is P8. Its capacity is 10,000 units. Fixed costs per unit are P4. Current outside sales is…
Question Feip Suppose that a manufacturer can produce a part for $9.00 with a fixed cost of $5,000. Alternately, the manufacturer could contract with a supplier in Asia to purchase the part at a cost of $11.00, which includes transportation. a. If the anticipated production volume is 1,500 units, compute the total cost of manufacturing and the total cost of outsourcing. b. What is the best decision? a. The total cost of manufacturing is $ (Simplify your answer.) PI ry sit nas mu Enter your answer in the answer box and then click Check Answer. parts remaining Check Answer Clear All Type here to search
3. CVP: Atlas Corp, has been asked to submit a bid on supplying underwater masks to Pandora. The company's current cost structure per mask is as follows: DM DL var. MOH var. SGA $9.00 $8.00 $7.50 $4.00 a. Assume that there would be no variable sales commission on this special order. Determine the lowest unit price that Atlas can bid without reducing its current level of operating income. b. Assume the company desires a 38 percent contribution margin ratio from this sale and that a special sales commission of 4 percent of the bid price will be applied to the order instead of its normal $4 variable sales commission. Determine the bid price per unit given these unique circumstances. c. Assume the product fixed costs are $180,000. How many units need to be sold to attain a profit of $249,000?
Buy P 1-P Low Cost High Cost Purchase Cost C1 = 35,000+ 0.08 x 2,500,000 C2 = 35,000+ 0.12 x 2,500,000 C3 = 200,000
Identify Breakeven in units for the scenario below: $170.000 $136.000 $102.000 $68.000 $34.000 GOOO 3000 2500 4000 Unit Sales Breakeven Analysis 1000 2000 3000 4000 5000 6000 7000 8000 9000 Units Sold O Fixed Costs Total Operating Costs Sales Revenues
Sh5 Please help.me Solution Thankyou.