13. For the following questions (13.18) about transfer pricing, assume the organization is X Co. Division...
number 13,14,15 please 13. For the following questions (13-18) or the following questions (13-18) about transfer pricing, assume the organization is X Co. Division S produces a component that can be sold to outside customers at a fair market price or to Division B at a transfer price. Division B uses the component to produce a finished product it sells to outside customers. Division B can also purchase the component from an outside supplier, Co. O at a fair market...
corporation has issued $2 million of long-term bonds paying 8% interest and S8 million of common stock. If the after-tax income $2.500.000, the capital employed $10 million, and the cost of capital is 12.16%, the EVA is: a. $1,248,000 c. $1,284,000 b. ($1.284,000) d. $1,121,600 13. For the following questions (13-18) about transfer pricing, assume the organization is X Co. Division S produces a component that can be sold to outside customers at a fair market price or to Division...
Transfer Pricing: Various Computations Corning Company has a decentralized organization with a divisional structure. Two of these divisions are the Appliance Division and the Manufactured Housing Division. Each divisional manager is evaluated on the basis of ROI. The Appliance Division produces a small automatic dishwasher that the Manufactured Housing Division can use in one of its models. Appliance can produce up to 30,000 of these dishwashers per year. The variable costs of manufacturing the dishwashers are $100. The Manufactured Housing...
Transfer Pricing Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $40. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The full product cost...
Exercise 11-3 (Static) Transfer Pricing Basics (LO11-3] Sako Company's Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market Variable costs per unit Fixed costs per unit (based on capacity) Capacity in units A A A 60 42 8 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will...
Exercise 11-3 (Static) Transfer Pricing Basics [LO11-3] Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 60 Variable costs per unit $ 42 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will...
Exercise 11-3 (Static) Transfer Pricing Basics [LO11-3] Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market $ 60 Variable costs per unit $ 42 Fixed costs per unit (based on capacity) $ 8 Capacity in units 25,000 Sako Company has a Hi-Fi Division that could use this speaker in one of its products. The Hi-Fi Division will...
Transfer PricingAulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $40. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The full product cost of...
In each of the cases below, assume that Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits. Case A B Division X: Capacity in units 99,000 107,000 Number of units being sold to outside customers 99,000 89,000 Selling price per unit to outside customers $54 $27 Variable costs per unit...
PROBLEM 131-4 Base Transfer Pricing |LDE] Alpha and Beta are divisions within the same company. The managers of both divisions are evalu ated based on their own division's return on investment (ROD). Assume the following information relative to the two divisions Case 400.000 400.000 150.000 100,000 Alpha Division: Capacity in units..... Number of units now being sold to outside customers.... Selling price per unit to outside customers..... Variable costs per unit. Fixed costs per unit (based on capacity) Beta Division...