Question
Transfer Pricing and Divisional Performance (Multinational Corporation) Division Costs Sales Volume Transfer Price Division A (Seller) Variable costs: $100,000, Fixed costs: $50,000, Production volume: 15,000
Transfer Pricing and Divisional Performance (Multinational Corporation)
Division | Costs | Sales Volume | Transfer Price |
Division A (Seller) | Variable costs: $100,000, Fixed costs: $50,000, Production volume: 15,000 units | - | Cost plus 25% |
Division B (Buyer) | - | External market price: $150/unit | - |
- Requirements:
- Calculate the transfer price from Division A to Division B.
- Analyze the impact of transfer pricing on Division A's profitability.
- Recommend a transfer pricing policy that maximizes overall corporate profitability.
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Management and Cost Accounting
Authors: Colin Drury
10th edition
1473748873, 9781473748910 , 1473748917, 978-1473748873
