What is the maximum transfer price

Assignment Help Accounting Basics
Reference no: EM131697269

Question: Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels located along major highways. Each year, the Motel Division purchases furniture for the motel rooms. Currently, it purchases a basic dresser from an outside supplier for $40. The manager of the Furniture Division has approached the manager of the Motel Division about selling dressers to the Motel Division. The full product cost of a dresser is $29. The Furniture Division can sell all of the dressers it makes to outside companies for $40. The Motel Division needs 10,000 dressers per year; the Furniture Division can make up to 50,000 dressers per year.

Transfer Pricing Refer to the information for Aulman Inc. above. Also, assume that the company policy is that all transfer prices are negotiated by the divisions involved.

Required: 1. What is the maximum transfer price? Which division sets it?

2. What is the minimum transfer price? Which division sets it?

3. Conceptual Connection: If the transfer takes place, what will be the transfer price? Does it matter whether or not the transfer takes place?

Reference no: EM131697269

Questions Cloud

Identify key responsibilities of early childhood classroom : Identify key responsibilities of early childhood classroom teachers with regard to children who have disability, IEP process, and their work inclusive settings.
Which division sets the maximum transfer price : Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget motels.
Percentage change in the price of bond dave : If interest rates suddenly rise by 1 percent, what is the percentage change in the price of Bond Dave? Enter the answer with 4 decimals (e.g. 0.0123).
What is an example of art that perhaps is overlooked : What do YOU think happened to the Lost Colony of Roanoke? Someone talks about idea that art is everywhere. What is an example of art that perhaps is overlooked?
What is the maximum transfer price : Aulman Inc. has a number of divisions, including a Furniture Division and a Motel Division. The Motel Division owns and operates a line of budget.
Calculate and insert the number of delinquent records : Calculate and insert the number of delinquent records, history and physical exam reports (H & Ps), and operative reports permitted according the Medical Staff
What are three benefits to humanity of space exploration : What are three benefits to humanity of space exploration? What are reasons why pre-employment drug testing can reduce turnover or violate employees' rights?
What am i willing to sacrifice in order to get an education : Discuss the critical thinking question in 50 words: "What am I willing to sacrifice in order to get an education?"
Discuss the depth of field used in one scene in the film : Discuss the "depth of field" used in one scene in the film. Examine the use of "contrast" and "color" in one scene.

Reviews

Write a Review

Accounting Basics Questions & Answers

  Sales 110000 cogs 57000 operating expenses 38000 based on

presented below are selected income statement data for kettridges farm for the month of april sales 110000 cogs 57000

  Employees of may fabricators inc earned gross wages of

employees of may fabricators inc. earned gross wages of 140000 during a recnt two week period. employee withholdings

  If the fixed manufacting cost were 42900 and te variable

on october the end of the first month of operation als company prepparte the following income statment based on

  Most importance to auditors for long-term liabilities

Which ASB balance assertion is of the most importance to auditors for long-term liabilities?

  When a material amount of land is involved in a lease

What are the guidelines for determining when a material amount of land is involved in a lease?

  On the basis of the following data for larson co for 2010

on the basis of the following data for larson co. for 2010 and the preceding year ended december 31 2010 prepare a

  Describe the organizations statement of cash flows

Describe the organization's statement of cash flows. Explain the format that the organization utilizes, including any unique areas of emphasis.

  What is the amount of depreciation for the first full year

What is the amount of depreciation for the first full year, during which the equipment was used 3200 hours

  Assignment on capstone research project

You have been selected as the consultant to develop a business plan for Durango Manufacturing Company, which is a start-up, medium-sized public manufacturing company.

  Potential tax problem with sale of land

Nall had purchased the land for $62,000. Write a memorandum to the controller of Nall, Inc., explaining the potential tax problem with the sale of the land to Trebor.

  Suggest how your organizations business strategies

suggest how your organizations business strategies processes and culture are aligned with its ais. recommend two types

  Absorption costing-variable costing income statements

Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

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!

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