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Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in Y, X and

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Problem 13.8. A Ltd. produces P by its two divisions, X and Y. P is first processed in X and then in Y, X and Y are treated as profit centres. The cost-volume-profit structure is as given below: Output X T Profit units Costs Net revenue 1,000 Rs. 900 Rs. 4.000 Rs. 3,100 1,100 1,000 4,300 3,300 1,200 1,120 4,540 1,300 3,420 1,250 4,730 1,400 3,480 1,400 1,500 4,900 1,580 3,500 1,600 5,030 1,800 3,450 5,110 3,310 Note: Net revenue for Y means the sale proceeds minus costs incurred in Y. These costs do not include the price of transferred material chargeable by X. Required: (a) Discuss the problemi. (b) Fix and explain the optimum transfer price for A Ltd

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