Chapter 11.A, Problem 1E

To determine

Transfer pricing is the concept used in the internal transfer of products within the segments of same company. The transfer price is a price at which one segment transfers its finished goods to other segment within the organization.

Requirement1a:

The lowest acceptable price for selling division.

Requirement1b:

To determine

The highest acceptable transfer price when only 20,000 units are sold.

Requirement1c:

To determine

The range of acceptable transfer price between two divisions.

Requirement1d:

To determine

The transfer shall take place or not from company viewpoint.

Requirement2a:

To determine

The lowest acceptable price for selling division.

Requirement2b:

To determine

The highest acceptable transfer price for purchasing division.

Requirement2c:

To determine

The range of acceptable transfer price between two divisions.

Requirement2d:

To determine

The transfer shall take place or not from company viewpoint.