1. Gamma Electronics Ltd.

Scenario: Transfer Pricing Decision

Division Details:

• Division A (Selling Division):
  • Variable Costs: $300,000
  • Fixed Costs: $150,000
  • Production Capacity: 20,000 units

• Division B (Buying Division):
  • Variable Costs: $250,000
  • Fixed Costs: $120,000
  • Demand: 15,000 units

Requirements:

• Determine the transfer price per unit for Division B to acquire products from Division A using the negotiated pricing method. Present calculations and strategic considerations in a table format.