When negotlating a transfer price, which price is most acceptable to the selling divislon if they are operating with Idle capacity? Multiple Choice the price must cover at least the variable manufacturing costs of the selling division the price must be less than the variable manufacturing costs of the selling division the price must cover at least the variable manufacturing costs of the buying division the price must cover at least the selling price to outside customers

When negotlating a transfer price, which price is most acceptable to the selling divislon if they are operating with Idle capacity? Multiple Choice the price must cover at least the variable manufacturing costs of the selling division the price must be less than the variable manufacturing costs of the selling division the price must cover at least the variable manufacturing costs of the buying division the price must cover at least the selling price to outside customers

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Many organizations use transfer pricing when transferring products between different divisions of the same organisation. Critically discuss the advantages and disadvantages of the method: Cost plus a mark-up transfer prices Note: Define, explain gives examples and advantages and disadvantages
Describe two bases for setting a transfer price and briefly explain why one would expect managers to have a bias toward buying internally before selling to an external party.
When performing sales mix analysis, which one of the following is true: O a. Producing and selling more units of the product with a higher contribution margin would likely decrease the breakeven point O b. Normally the calculation of the breakeven point for multiproduct is much simpler than that for a single product. O c. The sales mix is usually assumed to change. O d. Making changes to the sales mix will likely cause no change in the breakeven point O e. Shifting the sales mix to the product with a lower contribution margin will likely increase the overall contribution margin DUS PAGE NEXT PAGE F8 F9 F10 F11 F4 F5 F6 F7 F1 F2 F3 * @ 2# % & 1 2 3 6 7 W E T Y F J K A 1. C {V }BYN í M 41 * N
Many organizations use transfer pricing when transferring products between different divisions of the same organisation. Critically discuss the advantages and disadvantages of the method: Full cost transfer prices. Note: Define, explain gives examples and advantages and disadvantages
When the selling division is a full capacity, the goal congruent transfer price will be the: market price actual full cost actual variable cost standard full cost actual variable cost plus markup
Using the formula in the text, if the lowest acceptable transfer price from the viewpoint of the selling division is $95 and the opportunity cost per unit on outside sales is $38, then the variable cost per unit must be:
When the selling division in an Internal transfer can sell every product at Its market price, then the lowest acceptable transter price as far as the seling diion is concened is Multiple Cholce The amount that the purchasing division would have to pay an outslde seller to acquire a similar product for Its use. The fixed cost of producing a unit of product. The market price charged to outside customers. The variable cost of producing a unit of product. Total cost of producing a unit of product.
Which is the best description of a dual transfer price? A) The receiving division is charged the market value of the item transferred while the supplying division is credited with the standard variable cost B) The receiving division is credited the market value of the item transferred while the supplying division is charged with the standard variable cost C) The receiving division is charged the standard variable cost transferred while the supplying division is credited with the market value of the item D) The receiving division is credited the standard variable cost transferred while the supplying division is charged with the market value of the item