User Account

All Pages

Find what transfer price would recommend

Assignment Help Managerial Accounting
Reference no: EM132546742

Spark Ltd has two divisions, assembly and electrical. The assembly division transfers partially completed components to the electrical division at a predetermined transfer price. The assembly division's standard variable production cost per unit is $550. This division has spare capacity, and it could sell all its components to outside buyers at $680 per unit in a perfectly competitive market.

Required:

Question a) Determine a transfer price using the general rule.

Question b) How would the transfer price change if the assembly division had no spare capacity?

Question c) What transfer price would you recommend if there was no outside market for the transferred component and the assembly division had spare capacity?

Question d) Explain how negotiation between the supplying and buying units may be used to set transfer prices. How does this relate to the general transfer pricing rule?

Reference no: EM132546742

Questions Cloud

Discuss problems of letting plant managers participate : Briefly discuss this situation, focusing on the benefits and problems of letting Plant managers participate in the company's budgetary efforts
How does financial management works in an organization : i. How does financial management works in an organization?
What is the realized gain on the exchange to ABC Company : XYZ Company enters into an exchange transaction with LMN Company. What is the realized gain on the exchange to ABC Company
Exacerbate the global financial crisis : Did free-rider problem contribute/exacerbate the global financial crisis?
Find what transfer price would recommend : Find What transfer price would you recommend if there was no outside market for the transferred component and the assembly division had spare capacity?
How does financial management works in an organization : i. How does financial management works in an organization?
Prepare the liabilities section of larkspurs balance sheet : Presented here are liability items for Larkspur Inc. at December 31, 2022. Prepare the liabilities section of Larkspurs balance sheet
Calculate the probability of difference delta : Build a decision model to help Fast choose a path for production of the part and Fast believes keeping the internal production line open
Construct revenue budget for the upcoming academic year : South Hampton University, Construct revenue budget for the upcoming academic year. Determine the number of staff needed to cover classes.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Traditional approach to product costing

Critique your manager's view by discussing at least three benefits of adapting the total-life-cycle approach.

  Compute what will be the effect on net income

Marigold has sufficient unused capacity to produce the 3400 units. If the special order is accepted, what will be the effect on net income?

  Considered different allocation methods

1.In the previous chapters, we considered different allocation methods and considered which one might be "better."

  What will be the effect of the error on net income

Johnson corporation mistakenly overstates cost of goods sold by $52,000. What will be the effect of this error on Net Income for 2017? Assume a tax rate of 0%.

  Identify a control activity that would have been effective

For each error (listed as A. through I. below), identify a control activity that would have been effective in either preventing or detecting the error.

  What other types of information does management

Management accounting is a planning, controlling, and decision-making tool. Consider the features of management accounting and respond to the following: Do you agree that management accounting provides economic information for all interested parties?..

  Trey monson starts a merchandising business on december

1. Trey Monson starts a merchandising business on December 1 and enters into the following three inventory purchases. During December, Monson sells 15 units for $ 20 each on December 15.

  How to compute the number of equivalent units

How to Compute the number of equivalent units with respect to conversion cost. Determine the number of units that Fedora started

  Define what account would redited to record fedora

Fedora Inc. uses a weighted-average process costing system,Find What account would have been credited to record Fedora's completed production?

  Journalize the entry to record the division of net income

Journalize the entry to record the division of net income for 2014 under each of the independent assumptions - prepare a schedule the division of net income

  Compute the activity rate for each of the activity cost pool

Determine the unit product cost of each product for the current period using the activity-based costing approach - Compute the predetermined overhead rate

  In preparation for developing its statement of cash flows

In Millennium's statement of cash flows, what were net cash inflows (or outflows) from investing activities for 2011?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd