Cost Allocation and Transfer Pricing at General Electric

Requirements:

1. Implement a cost allocation method to allocate overhead costs among General Electric's divisions (e.g., Aviation, Healthcare, Renewable Energy).

Division	Direct Costs ($)	Overhead Costs ($)
Aviation	15,000,000	6,000,000
Healthcare	12,000,000	4,800,000
Renewable Energy	10,000,000	4,000,000

2. Determine transfer pricing for inter-divisional transactions based on cost-plus and negotiated pricing methods.
3. Evaluate the impact of different transfer pricing strategies on divisional profitability and corporate tax liabilities.
4. Recommend a transfer pricing policy aligned with General Electric's strategic goals to enhance financial performance.