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!
Q. What is Minimum pricing?
The minimum transfer price an internal seller would accept will depend on whether it has spare capacity to utilise or not.
If spare capacity exists the relevant cost and therefore minimum price to a seller would be the variable (marginal) cost of production e.g. extra cost of making and selling one more unit. Variable (marginal) cost would be the only cost considered by a seller because fixed overhead is normally unavoidable and would not change if supply did or did not take place. The variable (marginal) cost represents the absolute bare minimum transfer price to a seller, in circumstances of spare capacity, at this price, the seller would be indifferent but not out of pocket. Marginal costing may also be appropriate when no intermediate market exists for the seller e.g. Seller can only sell to an internal customer and no external customers are available.
If full capacity exists, the seller would have to turn away external customers and business will be lost if further internal supply were to take place. Because of this dilemma the seller would normally want a minimum price at least equal to the external market price it would normally charge when selling to external customers, this is assuming there is no difference in the cost of supplying internal or external customers e.g. differences in packaging, delivery or marketing costs, in which case the price would normally be adjusted.
The minimum transfer price for a seller at full capacity is generally the external market price, if for some reason the seller maybe discontinuing other products to supply internally, then the minimum price would be the variable (marginal) cost of production and the lost contribution from discontinuing other products for internal supply to take place e.g. the variable cost and contribution lost being the opportunity cost.
1.Middle managers are often at the center of efforts to develop tactical plans to implement established strategies. How are tactical plans typically established? What challenges co
Strategy Is Partly Proactive and It Is Partly Reactive 1. A company's strategy is usually a blend of (I) proactive actions on the part of managers to increase the company's ma
Adelphi is situated in a large regional centre about 100kms from the capital city. It has a population of 150,000 in the regional city itself and the surrounding area, predominantl
Question 1: Read the article in the assigned Reading, “Management: A Journey in Progress.” Which do you think are the most enduring management principles and management responsibil
AThis assignment provides you the opportunity to integrate the course concepts in a meaningful way to develop a set of recommendations for your organization of choice to become mor
Harriet's Fruit and Chocolate Company was established in 1935 in the Pacific Northwest of the United States to ship gift baskets of locally grown peaches and pears to customers in
An electronics firm is presently manufacturing an item that has a variable cost of $0.50 per unit and a selling price of $1.00 per unit. Fixed costs are$14,000 per month. present
Environmental scan: Arpanaa is located along the girivalam path of the holy city which is a favourable destination for many people who wish to stay .There are around three competi
Q. Show the Activity based budgeting? Activity based budgeting (ABB) uses cost 'drivers' for different support resources consumed e.g. machining, quality control or admini
do all organisations need strategic plans
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd