Ute Semi-Conductor Company Problem #2 Ute Semi-conductor superchips superchips External market Superchip Variable cost $170 Selling price $500 Market Demand 10,000 Hours/unit to produce 3 Max 30K Ute Mini-computer Production capacity of semi-conductor = 90,000 hours Ute has a 100% owned subsidiary (Ute Mini-Computer) that wants to purchase super chips. What should Ute establish as the Transfer Price Policy under the Optimum Transfer Pricing method? 3

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Please provide the Transfer Pricing Schedule/Policy under the Optimum Transfer Pricing Method for the attached problem.

Ute Semi-Conductor Company
Problem #2
Ute Semi-conductor
superchips
superchips
External
market
Superchip
Variable cost
$170
Selling price
$500
Market Demand
10,000
Hours/unit to produce
3
Max 30K
Ute Mini-computer
Production capacity of semi-conductor = 90,000 hours
Ute has a 100% owned subsidiary (Ute Mini-Computer) that wants to
purchase super chips. What should Ute establish as the Transfer Price
Policy under the Optimum Transfer Pricing method?
3
Transcribed Image Text:Ute Semi-Conductor Company Problem #2 Ute Semi-conductor superchips superchips External market Superchip Variable cost $170 Selling price $500 Market Demand 10,000 Hours/unit to produce 3 Max 30K Ute Mini-computer Production capacity of semi-conductor = 90,000 hours Ute has a 100% owned subsidiary (Ute Mini-Computer) that wants to purchase super chips. What should Ute establish as the Transfer Price Policy under the Optimum Transfer Pricing method? 3
Expert Solution
steps

Step by step

Solved in 2 steps

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education