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Exercise 15-20 Apply Transfer Pricing Rules (LO 15-2) Best Practices, Inc. is a management Consulting firm. Its Corporate Division vises private frms on the adoption
Exercise 15-20 Apply Transfer Pricing Rules (LO 15-2) Best Practices, Inc. is a management Consulting firm. Its Corporate Division vises private frms on the adoption and use of cost management systems Government Division coute with state and low governments overment Division has a lot that is interested in implementing an activity based osling system in public works department. The divisions ad proached the head of Corpo Division about using one of its associates Corporate Division charges clients 5075 per hour for social services. The same rate the consulting companies charpe The Government Division ad complained that it hire its own sociale at an estimated variable cost of $275 per hour, which is what Corporate pays soos Required: What is the minimum transfer price that Corporate Division should obtain for its services, stunning that it is operating capacity? Minum Wanderio Der how b. What is the maximum price that Government Division should pay? mum price per hour C-1. Is there any change in minimum transfer price as referred in part a, if Corporate Division had idle capacity? 4 Yes No c-2. Is there any change in maximum transfer price as referred in part b, if Corporate Division had idle capacity? oo Yes No
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