MANAGERIAL ACCOUNTING F/MGRS.
MANAGERIAL ACCOUNTING F/MGRS.
6th Edition
ISBN: 9781264100590
Author: Noreen
Publisher: RENT MCG
Question
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Chapter 11, Problem 11.3E

1.

a.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with a subsidiary and holding company or sisters’ company is referred to as transfer price.

The value of the lowest transfer price acceptable by the A Division.

1.

b.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with a subsidiary and holding company or sisters’ company is referred to as transfer price.

The value of the highest transfer price acceptable by the H Division.

1.

c.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

The range of acceptable transfer prices and to explain will the division managers will voluntarily agree to the transfer or not.

1.

d.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

Whether the transfer should take place or not.

2.

a.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with a subsidiary and holding company or sisters’ company is referred to as transfer price.

The value of the lowest transfer price acceptable by the A Division.

2.

b.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with a subsidiary and holding company or sisters’ company is referred to as transfer price.

The value of the highest transfer price acceptable by the H Division.

2.

c.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with a subsidiary and holding company or sisters’ company is referred to as transfer price.

The range of acceptable transfer prices and to explain will the division managers voluntarily agree to the transfer or not.

2.

d.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services.

Whether the transfer should take place or not.

3.

a.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

The value of the lowest transfer price acceptable by the A Division.

3.

b.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

The value of the highest transfer price acceptable by the H Division.

3.

c.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

The range of acceptable transfer prices to explain will the division managers will voluntarily agree to the transfer or not.

3.

d.

To determine

Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services. For example, the price at which the goods are exchanged with the subsidiary and holding company or sister company is referred to as the transfer price.

Whether the transfer should take place or not.

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7. Transfer Pricing Domagisko Company's Division 'S' (selling division) produces a small tool used by other companies as a key part in their products. Cost and sales data related to the small tool are given below: Selling price per unit Variable costs per unit P 50 P 30 Fixed costs per unit* P 12 based on capacity of 40,000 tools per year. The company's Division 'B' (buying division) is introducing a new product that will use the same tool such as the one produced by Division S. An outside supplier has quoted the Division B a price of P 48 per tool. Division B would like to purchase the tools from Division S, only if an acceptable transfer price can be worked out. REQUIRED: Consider the following independent cases: 1. Division S has ample idle capacity to handle all the Division B's needs: A) What is the minimum transfer price for Division S? B) What is the maximum transfer price for Division B? 2. Division S is presently selling all the tools it can produce to outside customers: A)…
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packman company has a division that manufactures a component that sells for $72 and has variable costs of $29 and fixed costs of $18. another division wants to purchase the component. what is the minimum transfer price if the division is operating at capacity? a. $72 b. $29 c. $47 d. $18
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