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