CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
6th Edition
ISBN: 9781264445356
Author: Noreen
Publisher: MCG
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Chapter 11, Problem 11.20P
1.
To determine
Introduction: The transfer price refers to the price at which the goods and services are exchanged between companies under common control or between divisions of the same company.
The value of the lowest acceptable transfer price for the selling division, the highest acceptable transfer price for the buying division, the range of acceptable transfer price and will the managers voluntarily agree to transfer the units along with the reasons for the same.
2.
To determine
Introduction: The transfer price refers to the price at which the goods and services are exchanged between companies under common control or between divisions of the same company.
To explain: The effect on the profits of the P Division, C division, and the entire company due to the change in the supply price of the P division.
3.
To determine
Introduction: The transfer price refers to the price at which the goods and services are exchanged between companies under common control or between divisions of the same company.
The value of the lowest acceptable transfer price for the selling division, the highest acceptable transfer price for the buying division, the range of acceptable transfer prices and will the managers voluntarily agree to transfer units within the divisions along with the reason for the same.
4.
To determine
Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services.
The P Division should meet the price of the outside supplier or not.
The effect on the profits of the company as a whole when the P Division does not meet the price of the outside supplier.
5.
To determine
Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services.
Whether the C Division should purchase from the P Division at a higher price for the good of the company as a whole.
6.
To determine
Introduction: The transfer price is the price that is charged by one department of the company to another department of the same company for the transfer of goods and services.
The effect on the profits of the company as a whole when the C Division is required to purchase 5,000 tons of pulp each year from the P Division at $70 per ton.
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Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow:
Selling price
$ 90
Expenses:
Variable
$ 62
Fixed (based on a capacity of 50,000 tons per year)
18
80
Net operating income
$ 10
Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 6,000 tons of pulp per year from a supplier at a cost of $83 per ton. Hrubec’s president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price.
Required:
For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $90 per ton.
1. What is the Pulp Division's lowest acceptable…
Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow:
Selling price
$ 90
Expenses:
Variable
$ 62
Fixed (based on a capacity of 50,000 tons per year)
18
80
Net operating income
$ 10
Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 6,000 tons of pulp per year from a supplier at a cost of $83 per ton. Hrubec’s president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price.
Required:
For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $90 per ton.
1. What is the Pulp Division's lowest acceptable…
Hrubec Products, Incorporated, operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow:
Selling price
$ 88
Expenses:
Variable
$ 60
Fixed (based on a capacity of 50,000 tons per year)
18
78
Net operating income
$ 10
Hrubec Products has just acquired a small company that manufactures paper cartons. Hrubec plans to treat its newly acquired Carton Division as a profit center. The manager of the Carton Division is currently purchasing 5,900 tons of pulp per year from a supplier at a cost of $81 per ton. Hrubec’s president is anxious for the Carton Division to begin purchasing its pulp from the Pulp Division if the managers of the two divisions can negotiate an acceptable transfer price.
Required:
For (1) and (2) below, assume the Pulp Division can sell all of its pulp to outside customers for $88 per ton.
1. What is the Pulp Division's lowest acceptable transfer…
Chapter 11 Solutions
CONNECT ONLINE ACCESS F/MANAGERIAL ACC.
Ch. 11 - Prob. 11.1QCh. 11 - Prob. 11.2QCh. 11 - Prob. 11.3QCh. 11 - Prob. 11.4QCh. 11 - Prob. 11.5QCh. 11 - Prob. 11.6QCh. 11 - Prob. 11.7QCh. 11 - Prob. 11.8QCh. 11 - Prob. 11.9QCh. 11 - Why is using sales dollars as an allocation base...
Ch. 11 - Prob. 1AECh. 11 - Prob. 1TF15Ch. 11 - Prob. 11.1ECh. 11 - Prob. 11.2ECh. 11 - Prob. 11.3ECh. 11 - Prob. 11.4ECh. 11 - Prob. 11.5ECh. 11 - Prob. 11.6ECh. 11 - Prob. 11.7ECh. 11 - Prob. 11.8ECh. 11 - Prob. 11.9ECh. 11 - Prob. 11.10ECh. 11 - Prob. 11.11ECh. 11 - Prob. 11.12ECh. 11 - Prob. 11.13ECh. 11 - Prob. 11.14ECh. 11 - Prob. 11.15ECh. 11 - Prob. 11.16ECh. 11 - Prob. 11.17PCh. 11 - Prob. 11.18PCh. 11 - Prob. 11.19PCh. 11 - Prob. 11.20PCh. 11 - Prob. 11.21PCh. 11 - Service Department Charges LO 11–4 Sharp Motor...Ch. 11 - Prob. 11.23PCh. 11 - Prob. 11.24PCh. 11 - Basic Transfer Pricing LO 11–3 Alpha and Beta...Ch. 11 - Prob. 11.26C
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