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1.What is the profit (loss) of Division P? Use a minus sign, not brackets to indicate a loss (if applicable). 2Explain briefly why the choice
1.What is the profit (loss) of Division P?
Use a minus sign, not brackets to indicate a loss (if applicable).
2Explain briefly why the choice of transfer price method was a good or bad idea in your view.
(Information repeated from previous question for convenience) Opera International Ltd has two divisions, O and P. Division o produces semi- finished goods exclusively for Division P. Division P turns the semi-finished goods into finished goods and sells them to external customers for 32 each. Further information about Division O and P for the year 2021 is provided below: Division 0 Division P Units Produced 70,000 70,000 Variable Cost (per unit) 11 18 Fixed Cost 50,000 40,000 Opera International Ltd uses a transfer price method of full cost + 15% margin for their semi-finished goodsStep by Step Solution
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