Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
15th Edition
ISBN: 9780133781106
Author: Charles T. Horngren, Srikant M. Datar, Madhav V. Rajan
Publisher: PEARSON
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Question
Chapter 22, Problem 22.27P
1.
To determine
The minimum transfer price at which the SD manager would be willing to sell the screens to the AD.
Given information:
The market price is $100 per screen.
The variable marketing and distribution costs are $8 per screen.
The incremental
The price at which AD purchases screen is $100 per screen.
The purchasing cost is $7 per screen.
2.
To determine
The maximum transfer price at which the AD manager would be willing to purchase the screens from the SD.
Given information:
The market price is $100 per screen.
The variable marketing and distribution costs are $8 per screen.
The incremental manufacturing cost is $65 per screen.
The price at which AD purchases screen is $100 per screen.
The purchasing cost is $7 per screen.
3.a.
To determine
The minimum transfer price at which the SD manager would be willing to sell the screens to the AD.
Given information:
SD can sell only 70% of its output capacity of 20,000 screens per month.
The AD can assemble and sell more than 20,000 sets per month.
3.b.
To determine
From the viewpoint of the management of the company, the amount of the SD output to be transferred to AD.
3.c.
To determine
The resulting transfer price if the managers split the difference and whether this price achieves the desired outcome.
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Chapter 22 Solutions
Cost Accounting, Student Value Edition Plus MyAccountingLab with Pearson eText -- Access Card Package (15th Edition)
Ch. 22 - Prob. 22.1QCh. 22 - Describe three criteria you would use to evaluate...Ch. 22 - What is the relationship among motivation, goal...Ch. 22 - Name three benefits and two costs of...Ch. 22 - Organizations typically adopt a consistent...Ch. 22 - Transfer pricing is confined to profit centers. Do...Ch. 22 - What are the three methods for determining...Ch. 22 - What properties should transfer-pricing systems...Ch. 22 - All transfer-pricing methods give the same...Ch. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - Prob. 22.12QCh. 22 - Prob. 22.13QCh. 22 - Under the general guideline for transfer pricing,...Ch. 22 - How should managers consider income tax issues...Ch. 22 - Prob. 22.16ECh. 22 - Prob. 22.17ECh. 22 - Prob. 22.18ECh. 22 - Prob. 22.19ECh. 22 - Prob. 22.20ECh. 22 - Prob. 22.21ECh. 22 - Prob. 22.22ECh. 22 - Prob. 22.23ECh. 22 - Prob. 22.24ECh. 22 - Prob. 22.25ECh. 22 - Prob. 22.26ECh. 22 - Prob. 22.27PCh. 22 - Prob. 22.28PCh. 22 - Prob. 22.29PCh. 22 - Prob. 22.30PCh. 22 - Prob. 22.31PCh. 22 - Prob. 22.32PCh. 22 - Prob. 22.33PCh. 22 - Prob. 22.34PCh. 22 - Prob. 22.35PCh. 22 - Prob. 22.36P
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