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Please answer this Managerial Accounting question in terms and the method mentioned below. In a firm production is carried on through two divisions. The product
Please answer this Managerial Accounting question in terms and the method mentioned below.
In a firm production is carried on through two divisions. The product of division A is transferred to division B and the product of division B is sold at TK. 258 per unit as 10 finished goods. Estimated annual production is 5,000 units and cost of production will be as follows: Division A TK. 60 1,20,000 Division B TK. 95 1,70,000 Variable cost (per unit) Fixed cost Division A wants to fix up transfer price by adding 25% on total cost. 1. II. NII. What will be the transfer price per unit for division A? What will be rate of profit on total cost of division B?: What should be the transfer price of division A if same rate of profit is taken on divisional cost? Seller's peres spective : Total Price Variable cost + per unit Total contribution mangin on lost sales No. of unit transferred Buyer's perspective: Total
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