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I dont knwo if I am doing this right? vood Motor Co. (HMC) manufactures airbag components and sells them on the open market. HMC also
I dont knwo if I am doing this right?
vood Motor Co. (HMC) manufactures airbag components and sells them on the open market. HMC also builds automobiles equipped with airbags. Below are two transactions between the air bag division and the safety restraint division. Component 990-263 Component LS-800-B 73,000 46,443 37,000 37,000 Airbag division (seller) Capacity in units Number of units sold externally Market selling price Selling cost per unit on market Variable cost per unit Fixed cost per unit 10,000 Safety restraint division (buyer) Number of units needed Purchase price from external supplies Price paid by Division B's customers S Further processing cost per units 10,000 45 S 100 S 110 61S A.) For 990-763, what would the seller's minimum and buyer's maximum be under the negotiated transfer price method? Assume the airbag division manager is a fair person and the safety restraint division buyer is well-educated on the products their division purchases. Is negotiation possible? 2 points. Market Selling Price - Selling Cost per Unit) (576-59) Minimum Transfer Price S 67 Price paid by Division B's customers (Sellers) S Maximum Transfer Price 45 No I don't think the negotiation is possible, Since the Minimun transfer price of the seller is more than what the buyer is willing to transfer it for. B.) Would the market price method be appropriate for transferring LS-880-B internally? Why or why not? 2 points Seller S 74 Minimum Component LS-800-B Buyer S 70 Maximim No, I don't think so that the market price woulde be appropriate for transfering LS-880-B, Since the price purchaces the product is less than the sellers makes on the market. C.) What would the seller's minimum be for transferring LS-880-B internally under the market price method? 2 points. Seller S 74 Minimum D.) What would the buyer's maximum be for transferring LS-880-B internally under the market price method? 2 points. Buyer S 70 Maximim E.) For LS-880-B, would intemal transfer be possible? Why or why not? 2 points. No, I don't think so that the market price woulde be appropriate for transfering LS-880-B, Since the price purchaces the product is less than the sellers makes on the marketStep by Step Solution
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