=+3 Suppose Romney Ltd uses the transfer price from requirement 2, and each division is evaluated on
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=+3 Suppose Romney Ltd uses the transfer price from requirement 2, and each division is evaluated on its own after-tax division operating profit. Now suppose the Nept Division has an opportunity to sell 8000 units of IP-2007 to an outside customer for $68 each. The Nept Division will not incur shipping costs because the customer is nearby and offers to pay for shipping. Assume that, if the Nept Division accepts the special order, the Pluto Division will have to buy 8000 units of the substitute product in Australia at $75 per unit.
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Related Book For 
Cost Accounting A Managerial Emphasis
ISBN: 9781442563377
2nd Edition
Authors: Monte Wynder, Madhav V. Rajan, Srikant M. Datar, Charles T. Horngren, William Maguire, Rebecca Tan
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