Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4 ,5 and 6 need urgent please Xn company manufacture and sell cricket bats. Xn company has two departments Dept. P ( making of cricket

image text in transcribed4 ,5 and 6 need urgent please

Xn company manufacture and sell cricket bats. Xn company has two departments Dept. P ( making of cricket bats from wood) and Dept. Q (add the cover and complete the product with the brand name printed). Dept P sells wooden Bats to Dept Q. Dept. Q completes the product and sells the finished product to the external customer for OMR 70 per unit. Further information is as follows: Dept. P Dept-Q Number of units transferred/sold 400 400 Material Cost per unit OMR 5 OMR 3 Labour Cost OMR 4 OMR 3 Other Variable costs per unit OMR 1 OMR 1 Annual Fixed costs OMR 4000 OMR 3000 Required: i) Calculate Transfer Price based on Marginal Cost + 20% ii) Calculate the budgeted annual profit for division P and Q and for Company as a whole under Marginal Cost + 20% iii) Calculate Transfer Price based on Full Cost + 25% iv) Calculate the budgeted annual profit for division P and Q, and for Company as a whole under Full Cost + 25% Y v) Evaluate both divisional profits from the perspective of marginal and full cost transfer pricing and company vi) Discuss how the firm can achieve goal congruence using transfer pricing

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Computer Accounting With QuickBooks 2021

Authors: Donna Kay

20th Edition

1264069197, 9781264069194

More Books

Students also viewed these Accounting questions

Question

L A -r- P[N]

Answered: 1 week ago

Question

a score of 60 or higher on the test?

Answered: 1 week ago