1.
Compute the income statement of Division A, Division B, and company as a whole.
Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.
2.
Compute the income statement of Division A if manufacturing capacity is 20,000 circuit boards, Division B if it purchase 5,000 circuits boards instead of 4,000 , and company as a whole.
Introduction: Transfer prices means the price charged on the product or service provided by on department of the company to another department of the company. Divisions are evaluated on the profit basis, or residual income price must be fixed for the transfer. Prices charged in these situations are referred as transfer prices.
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Chapter 11A Solutions
MANAGERIAL ACCOUNTING FOR MANAGERS
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