Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Transfer Pricing
Johnston Chemical Company manufactures a wide variety of industrial chemicals and adhesives. It pur- chases much of its raw material in bulk from other chemical companies. One chemical, T-Bar, is prepared in one of Johnston's own plants. T-Bar is shipped to other Johnston plants at a specified internal price.
The Johnston adhesive plant requires 10,000 barrels of T-Bar per month and can purchase it from an outside supplier for $150 per barrel. Johnston's T-Bar unit has a capacity of 20,000 barrels per month and is presently selling that amount to outside buyers at $165 per barrel. The difference between the T-Bar unit's price of $165 and the outside firm's T-Bar price of $150 is due to short-term pricing strategy only; the mate- rials are equivalent in quality and functionality. The T-Bar unit's selling cost is $5 per barrel, and its variable cost of manufacturing is $90 per barrel.
Required
Question 1: From the standpoint of the company as a whole, should the adhesive unit purchase T-Bar inside or outside the firm? Show calculations to support your answer.
Question 2: Based on your answer in requirement 1, what is T-Bar's proper transfer price?
Question 3: How would your answer to requirements 1 and 2 change if the T-Bar unit had a capacity of 30,000 bar- rels per month?
Calculate Disk City's break-even point for the current year in number of video disks. (Round your final answer up to nearest whole number.)
Derek Company prepares financial statements annually. During the year, the following selected transactions occurred.
Determine Calculate Watervan's economic value added (EVA). (Do not round intermediate calculations. Enter your answer in millions rounded to 2 decimal places.)
How many planes does Doghayneed to sell in order to break-even? what strategies Doghaymight use to ensure profitable operations with increase in variable costs?
Detail and discuss what you consider to be the five (5) key developments in accounting from earliest times to the present day. Provide an example.
Do you need additional training in specific areas of communication? How might you improve your current communication skills to prepare you for advancement in your profession? Use 3-4 references to support your analysis.
Corporate profit over the five-year life will be _____ than the profit that would have been generated had the existing machine been retained for five years.
Calculate the standard labour price per hour and explain how a favourable direct labour rate variance may be interrelated with an unfavourable direct labour efficiency variable.
Shares of $5 value Treasury stock at $13 per share. If the cost of acquiring the shares was $10 per share, what is the entry for the sale should be?
What is Preview's profit margin on computer monitors? Why is the profit margin to thin on computer Tonitors - what are sortie of the steps that Proview International has taken to control costs?
What is the theoretical fixed manufacturing overhead rate per wrench? What is the practical fixed manufacturing overhead rate per wrench?
Calculate the net present value assuming a 17% rate of return (Ignore income taxes). Magna Inc. is considering modernizing its production facility by investing
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd