Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Tata Group has many subsidiaries. The managers of two subsidiaries, brahim and Maria, come together to make a deal on the price of decorative lamps.
Tata Group has many subsidiaries. The managers of two subsidiaries, brahim and Maria, come together to make a deal on the price of decorative lamps. brahim can purchase the lamps from another company at \$89. Maria can sell the lamps at $70 and the variable cost of the lamp is $46. a.) If Maria's company has excess capacity, what might be the deal price? b.) If Maria's company doesn't have excess capacity, what might be the deal price? c.) If ibrahim wants to buy 3000 lamps and wants some special additions to the lamp which cause $4 increase in cost. Maria needs to forgo the sales of 4000 regular lamps if she accepts this offer. What is the minimum transfer price for Maria? Tata Group has many subsidiaries. The managers of two subsidiaries, brahim and Maria, come together to make a deal on the price of decorative lamps. brahim can purchase the lamps from another company at \$89. Maria can sell the lamps at $70 and the variable cost of the lamp is $46. a.) If Maria's company has excess capacity, what might be the deal price? b.) If Maria's company doesn't have excess capacity, what might be the deal price? c.) If ibrahim wants to buy 3000 lamps and wants some special additions to the lamp which cause $4 increase in cost. Maria needs to forgo the sales of 4000 regular lamps if she accepts this offer. What is the minimum transfer price for Maria
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started