Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Carla Vista Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on
Carla Vista Industries is a decentralized firm. It has two production centres: Vancouver and Kamloops. Each one is evaluated based on its return on investment. Vancouver has the capacity to manufacture 300,000 units of component TR222. Vancouver's variable costs are $150 per unit. Kamloops uses component TR222 in one of its products. Kamloops adds $90 of variable costs to the component and sells the final product for $450. Consider the following independent situations: Vancouver can sell all 300,000 units of TR222 on the open market at a price of $255 per unit. Kamloops is willing to buy 30,000 of those units. What should the transfer price be? Transfer price $ eTextbook and Media per unit Of the 300,000 units of component TR222 it can produce, Vancouver can sell 210,000 units on the open market at a price of $255 per unit. Kamloops is willing to buy an additional 30,000 units. What should the minimum transfer price be? Minimum transfer price $ per unit
Step by Step Solution
★★★★★
3.44 Rating (147 Votes )
There are 3 Steps involved in it
Step: 1
Answer To calculate the transfer price we can use the market value approach The transfer price shoul...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started