Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division. The lowest transfer price acceptable by A Division. The highest transfer price acceptable by B Division. The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

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Answer 1

Question

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

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Exercise 11-13 (Algo) Transfer Pricing Situations [LO11-3] [The following information applies to the questions displayed below.] In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. Case A B Division X: Capacity in units Number of units being sold to outside customers Selling price per unit to outside customers 95,000 95,000 96,000 79,000 $ 50 $ 30 Variable costs per unit Fixed costs per unit (based on capacity) Division Y: $ 28 $ 12 $ 6 $ 4 Number of units needed for production 17,000 17,000 Purchase price per unit now being paid to an outside supplier $ 43 $ 24 Exercise 11-13 (Algo) Part 2 Required: 2. Refer to the data in case B above. In this case, there will be no savings in variable selling costs on intracompany sales. a. What is the lowest acceptable transfer price from the…

Exercise 8 (Transfer Pricing Situations) In each of the cases below, assume that Division A has 'a product that can be sold either to outside customers or to Division B of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. Case 1 2 Division X: Capacity in units. Number of units being sold to outside customers.. Selling price per unit to outside customers Variable costs per unit... Fixed costs per unit (based on capacity). 100,000 100,000 P50 P30 100,000 80,000 P35 P20 P 8 Division Y: Number of units needed for production... Purchase price per unit now being paid to an outside supplier.. 20,000 20,000 P47 Р34 Required: 1. Refer to the data in case A above. Assume that P2 per unit in variable selling costs can be avoided on intracompany sales. If the managers are free to negotiate and make decisions on their own, will a transfer take place? If so, within what range will the transfer price fall? Explain. 2.…

Answer 2

Question

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Answer 6

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

Answer 7

Chapter 11, Problem 25P

1.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers probably agree to a transfer.

Answer 8

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

Answer 9

2.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether there is any disagreement between the managers related to the transfer price.

The loss in potential profits of the company as a whole.

Answer 10

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

Answer 11

3.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

Return on Investment or asset: It establishes the relationship between the net income and the assets or capital employed. The ratio is used to measure the overall performance of an organization by looking at how efficiently an organization uses its resources.

The lowest transfer price acceptable by A Division.

The highest transfer price acceptable by B Division.

The range of acceptable transfer prices. Also, determine whether the managers agree to transfer.

Whether the return on investment of the A division increases, decreases, or remains unchanged.

Answer 12

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Answer 13

4.

To determine

Transfer price: Transfer price is the price at which goods and services are transferred between divisions or centres in an organization. The price charged to transfer goods and services is recorded as an expense in the buying division and revenue in the selling division.

The lowest transfer price acceptable by A Division.

Answer 14

Expert Solution & Answer

Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 11 - Prob. 1Q Ch. 11 - Prob. 2Q Ch. 11 - Prob. 3Q Ch. 11 - Prob. 4Q Ch. 11 - Prob. 5Q Ch. 11 - Prob. 6Q Ch. 11 - Prob. 7Q Ch. 11 - Prob. 8Q Ch. 11 - Prob. 9Q Ch. 11 - Prob. 10Q

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Chapter 11 Solutions