Describe the Ngeboba transaction flow

Reference no: EM132811819

Question - As a boba manufacturer company, Ngeboba supplies boba to Gula Hula and BobaTime. Ngeboba supplies 100 kgs to Gula Hula per month and also 500 kgs to Boba Time per month. Ngeboba as one of the founders of Gula Hula and BobaTime, felt responsible for the supply of boba for both brands. Ngeboba itself has a product cost of IDR 10,000 per kilo. Ngeboba sells to other customers than Gula Hula and BobaTime for IDR 20,000 per kilogram. Gula Hula gets prices from other suppliers at IDR 17,000 per kilogram, while BobaTime gets 2,000 cheaper prices per kilogram than the price obtained by Gula Hula because it buys more. In general, Ngeboba's production capacity is 2 (two) tons per month. During the 3rd quarter, Ngeboba felt that his sales had risen drastically, so Ngeboba was faced with the following conditions:

A. Demand from customers is full up to 2 (two) tons in July because it is the dry season. With Ngeboba, they felt that they couldn't help but they need to supply Gula Hula and BobaTime.

B. In August, Ngeboba increased its capacity to 3 tons to meet the needs of consumers and learned from last month that it must continue to supply Gula Hula and BobaTime.

C. In September, Ngeboba also produced 3 tons to be able to supply all customers as well as Gula Hula and Boba Time needs.

Describe the Ngeboba transaction flow with the two companies and explain with each of the transfer pricing calculations for Gula Hula and BobaTime including explaining using upper limit and lower limit charts (for calculations required to use formulas).

Reference no: EM132811819

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