Comfort Furniture Manufacturing, Inc., has a division in the United States that produces and sells furniture for
Question:
Comfort Furniture Manufacturing, Inc., has a division in the United States that produces and sells furniture for discount furniture stores. One type of sofa is made in the International Division in China. The sofas are sold externally in the United States for
$250 each. It costs $7.50 per sofa for shipping and $10 per sofa for import duties. When the sofas are sold externally, Comfort Furniture Manufacturing spends $25 each for commissions and an average of $1.30 per sofa for advertising.
Required:
1. Which Section 482 method should be used to calculate the allowable transfer price?
2. Using the appropriate Section 482 method, calculate the transfer price.
LO1
Step by Step Answer:
Introduction To Cost Accounting
ISBN: 9780538749633
1st International Edition
Authors: Don R. Hansen, Maryanne Mowen, Liming Guan, Mowen/Hansen