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Computech Company operates as a decentralized multidivisional electronics company. Its laptop division buys most of its monitors from the screen division. The screen divisions incremental
Computech Company operates as a decentralized multidivisional electronics company. Its laptop division buys most of its monitors from the screen division. The screen divisions incremental costs for manufacturing the moni- tors are $280 per unit. The screen division is currently working at 85% of capacity. The monitors current market price is $310 per unit. See attached screenshot
P9-48A Computech Company operates as a decentralized multidivisional electronics company. Its laptop division buys most of its monitors from the screen division. The screen division's incremental costs for manufacturing the moni tors are $280 per unit. The screen division is currently working at 85% of capacity. The monitor's current market price is $310 per unit Instructions (a) Using the general approach to transfer pricing, determine the minimum transfer price for the screen division (b) Computech Company's transfer price rules state that whenever divisions with unused capacity sell products internally (a) $280 they must transfer the products at incremental costs. Discuss how this transfer-price policy will affect goal congruence, division performance, and autonomy (c) The screen and laptop divisions have negotiated a transfer price between $280 and $310 per monitor. Discuss the im pact of this transfer price on each division in terms of goal congruence, division performance, and division autonomyStep by Step Solution
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