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Q4 Cost &MA 11-4-2022 AlDoha group owns two subsidiaries North and South. North produces and sells Metals; the cost structure is as the following: Variable
Q4 Cost &MA 11-4-2022 AlDoha group owns two subsidiaries North and South. North produces and sells Metals; the cost structure is as the following: Variable Cost 150$ per unit, Fixed annual cost is 2 million. The North can sell 40,000 Metals for 280$ in the market. The South buys 4000 units from the market for 230$ and then process it and sell it for 350$. Requirements: What is the transfer price, If AlDoha top management imposes 10% of the total cost as transfer price? 2 Ms If the North division has 2500 units idle capacity determine the upper and lower levels? 2 Ms If the North division has 1000 units idle capacity determine the upper and lower levels
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