Chapter 14, Problem 14.18E

To determine

(a)

Concept introduction:

In the Transfer Pricing, one unit is transferred from one department to another department. The price of transferred unit is decided through Company's polices. For example: - cost plus margin, fixed price, variable cost etc.

To compute:

The operating income increased of Kaufman Manufacturing if Department quoted price $\$22$.

To determine

(b)

Concept introduction:

In the Transfer Pricing, one unit is transferred from one department to another department. The price of transferred unit is decided through Company's polices. For example: - cost plus margin, fixed price, variable cost etc.

To compute:

The operating income increased of appliance division.

To determine

(c)

Concept introduction:

In the transfer pricing, unit is transferred from one department to another department. The price of transferred unit is decided considering company polices. For example: - cost plus margin, fixed price, variable cost etc.

To compute:

The operating income increased of electronic division.

To determine

(d)

Concept introduction:

In the transfer pricing, unit is transferred from one department to another department. The price of transferred unit is decided consideringcompany polices. For example: - cost plus margin, fixed price, variable cost etc.

The range of acceptable transfer using the negotiated price approach and reasons for the same.