User Account

All Pages

What is the maximum amount perfume division would be willing

Assignment Help Managerial Accounting
Reference no: EM132662601

Perfumes Ltd has two divisions: the Perfume Division and the Bottle Division. The company is decentralised and each division is evaluated as a profit centre. The Bottle Division produces bottles that can be used by the Perfume Division. The Bottle Division's variable manufacturing cost per unit is $3.00 and shipping costs are $0.20 per unit. The Bottle Division's external sales price is $4.00 per unit. No shipping costs are incurred on sales to the Perfume Division. The Perfume Division can purchase similar bottles in the external market for $3.50. The Bottle Division has sufficient capacity to meet all external market demands in addition to meeting the demands of the Perfume Division.

Required:

Problem a) Using the general rule, determine the minimum transfer price

Problem b) Assume the Bottle Division has no excess capacity and can sell everything produced externally. Would the transfer price change?

Problem c) Assume the Bottle Division has no excess capacity and can sell everything produced externally. What is the maximum amount Perfume Division would be willing to pay for the bottles?

Problem d) When is it more appropriate to use market-based transfer price rather than cost-based transfer price?

Reference no: EM132662601

Questions Cloud

Discuss the arguments for and against legalizing drugs : Listed below are suggested topics for your term paper. The topic you choose for the term paper must be one of those listed below unless you had a prior approval
How each of the material events should be : Discuss how each of the above material events should be dealt with in the financial statements of Ina Bhd. for the year ended 31 May 2019.
Calculate the amount of impairment loss to be recognized : For each of the following alternative restructuring arrangements, calculate the amount of impairment loss to be recognized by Rainy Bank
Shaping up the marketing of business : What is the power of social media for shaping up the marketing of business.
What is the maximum amount perfume division would be willing : The Perfume Division and the Bottle Division. What is the maximum amount Perfume Division would be willing to pay for the bottles?
Stages of group development as identified by tuckman : Describe the four stages of group development as identified by Tuckman. Describe four of the six factors which distinguish successful teams.
Summarize trends in us terrorism in brief : Summarize Trends in U.S Terrorism from 1994 to 2020 (as contained in the article). Provide suggestions or recommendations on what the government need to do to.
What is the amount of goodwill : The net assets of Ace Inc. excluding goodwill totaled P2,400,000 and earnings for the last 5 years totaled P2,670,000. What is the amount of goodwill
Variations in the cost of premiums justifiable : Why are insurance companies' variations in the cost of premiums justifiable?

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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