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An appropriate transfer price between two division of the Fathom Company can be determined from the following data: Fabricating Division 76 Market price of subassembly
An appropriate transfer price between two division of the Fathom Company can be determined from the following data:
Fabricating Division 76
Market price of subassembly 46
Variable cost of subassembly 3,600
Number of units needed 2,200
What is the natural bargaining range for the two divisions?
Between $46 & $76
Between $76 & $122
Any amount less than $76
$76 is the only acceptable transfer price
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