1. Apple sets transfer prices between divisions: Manufacturing division cost $80/unit, Retail division external market price $100/unit, transfer price $90/unit.
   • Requirements:
     • Apply the revenue recognition principle to determine when Apple should recognize revenue related to inter-division transfers.
     • Calculate the impact of transfer pricing on divisional profits considering revenue recognition.
     • Recommend a transfer pricing strategy that aligns with revenue recognition guidelines and divisional profitability goals.
     • Discuss the ethical considerations in setting transfer prices and revenue recognition practices.
     • Evaluate the performance of each division under different transfer pricing scenarios with revenue recognition implications.