Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division. Whether the division accepts or rejects the $340 price.

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Answer 1

Question

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

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Exercise 11-3 (Algo) 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 $ 120 Variable costs per unit $ 102 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 need 5,000 speakers per year. It has received a quote of $117 per speaker from another manufacturer. Sako Company evaluates division managers on the basis of divisional profits. Required: 1. Assume the Audio Division sells only 20,000 speakers per year to outside customers. a. From the standpoint of the Audio Division, what is the lowest acceptable transfer price for speakers sold to the Hi-Fi Division? b. From the standpoint of the Hi-Fi Division, what is the highest acceptable transfer price for speakers…

a company audio division produces a speaker that is used by manufactureers of various audio products Sales and cost data on the speaker follow Selling price per unit 120 varioable cost per unit 102 Fixed costs per unit $8 Capacity in units 25,000 Assume the dvision is selling 22500 speakers per year tocusotmers a) what is the lowest acceptable transfer price b) what is highest accepatbale transfer price What is the range of acceptable transfer prices between 2 division If left free to negotiate without interference would you expect divison managers to voluntaily agree to transfer 5000 speakers fromthe Audio divison to Hi Fi? why or why not From the standpoint of the entire company should the transfer take place why or why not?

Company E has two divisions, Division A and Division B. Division A is currently buying Component X from an external seller for $13. Division B produces Component X and has excess capacity. Using the following data, what would the transfer price per unit if Division A purchased Component X from Division B at the market-based transfer price? • Variable cost per unit $6 • Fixed cost per unit 1.65 • Division B sales price of Component X 14.50

Answer 2

Question

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Answer 6

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

Answer 7

Chapter 11, Problem 11.23P

1.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

Whether the division accepts or rejects the $340 price.

Answer 8

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

Answer 9

2.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q rejects the $340 price.

Answer 10

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

Answer 11

3.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The financial advantage or disadvantage if division Q accepts the $340 price.

Answer 12

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Answer 13

4.

To determine

Introduction: Transfer price is the price at which goods and services are transferred between divisions or centers in an organization. The price charged for the transfer of goods and services is recorded as an expense in the buying division and revenue in the selling division.

The impact of using market price as a transfer price in intra-company transactions.

Answer 14

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Answer 15

Expert Solution & Answer

Answer 16

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Answer 17

Ch. 11 - Prob. 11.1Q Ch. 11 - Prob. 11.2Q Ch. 11 - Prob. 11.3Q Ch. 11 - Prob. 11.4Q Ch. 11 - Prob. 11.5Q Ch. 11 - Prob. 11.6Q Ch. 11 - Prob. 11.7Q Ch. 11 - Prob. 11.8Q Ch. 11 - Prob. 11.9Q Ch. 11 - Why is using sales dollars as an allocation base...

Solution Summary: The author explains that transfer price is the price at which goods and services are transferred between divisions or centers in an organization.

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Chapter 11 Solutions