Chapter 10, Problem 12E

1.

To determine

Identify the minimum transfer price that Division G would be willing to accept, identify the maximum transfer price that the Division BW would be willing to pay. Identify whether the internal transfer takes place or not, if yes compute the benefit or loss to the firm as a whole.

2.

To determine

Identify whether the Person E is interested in the change in the transfer price 2.40. Support the decision with calculations.

3.

To determine

In case, the internal transfer takes place at full manufacturing cost, identify the transfer price would be and whether the transfer is takes place or not.