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Calculating Transfer Price Trimble Crane, Inc. has a number of divisions, including the Palm Division, a producer of hydraulic pumps, and Acer Division, a
Calculating Transfer Price Trimble Crane, Inc. has a number of divisions, including the Palm Division, a producer of hydraulic pumps, and Acer Division, a manufacturer of motors. Palm Division produces the h20-model pump that can be used by Acer Division in the production of motors that regulate the raising and lowering of the motor's crane derrick. The market price of the h20-model is $724, and the full cost of the h20-model is $540. Required: 1. If Trimble Crane has a transfer pricing policy that requires transfer at full cost: What will the transfer price be? Do you suppose that Palm and Acer divisions will choose to transfer at that price? Acer Division chooses to transfer Palm Division refuses to transfer 2. If Trimble Crane has a transfer pricing policy that requires transfer at market price: What would the transfer price be? Do you suppose that Palm and Acer divisions would choose to transfer at that price? Acer Division chooses to transfer Palm Division chooses to transfer
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