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(a) Assume that the transfer price is at full costs of Japanese division plus 20%. (b) Assume that there is no internal transfer between the
(a) Assume that the transfer price is at full costs of Japanese division plus 20%. (b) Assume that there is no internal transfer between the Japanese and Canadian divisions. The Canadian division will obtain the circuit board in Canada for $330 and the Japanese division will sell the circuit board in the Japanese market. (c) If you were the head of the Canadian division, would you rather do business with the Japanese division or buy the circuit board locally in Canada? Why? Support your answer with all necessary calculations. (d) If you were the director in the headquarter of Aston, would you recommend option (a) or (b) above? Explain. Support your answer with all necessary calculations
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