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PROBLEM 6.1 A Company fixes the inter-divisional transfer prices for its product on the basis of cost plus an estimated return on investment in its
PROBLEM 6.1 A Company fixes the inter-divisional transfer prices for its product on the basis of cost plus an estimated return on investment in its divisions. The relevant portion of the budget for the Division A for the year 2018-19 is given below: Fixed Assets $5,00,000; Current Assets (other than Debtors) $3,00,000; Debtors $2,00,000; Annual Fixed Cost of the Division $8,00,000 ; Variable Cost per unit of Product $10; Budgeted Volume of Production per year (units) $4,00,000; Desired Return on Investment 28%. You are required to determine the transfer price for the Division A
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