Question
Explain Transfer Price Teslum Inc. has a number of divisions, including the Machina Division, a producer of high-end espresso makers, and the Java Division, a
- Explain Transfer Price
Teslum Inc. has a number of divisions, including the Machina Division, a producer of high-end espresso makers, and the Java Division, a chain of coffee shops.
Machina Division produces the EXP-100 model espresso maker that can be used by Java Division to create various coffee drinks. The market price of the EXP-100 model is $950, and the full cost of the EXP-100 model is $475.
Required:
1.If Teslum has a transfer pricing policy that requires transfer at full cost, explain what will the transfer price be?
$
2.If Teslum has a transfer pricing policy that requires transfer at market price, explain what would the transfer price be?
$
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