FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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In a company operational activities are performed to fabricate products or to provide services. Within
a company individual departments provide services not only for the main business but frequently also
for other departments. Those services can be measured by their quantity, however due to lack of
market prices they cannot be rated by values.
The following table describes the services within the different department or for the main business
as well as the primary costs of a company.
recipient
overall
| primary
ABC D|main business performance
costs
A 3 12 0
B1 21 1
C2 10 2
D0 1
14
1
6
10
5
24
1
6.
10
(a) Perform an internal cost allocation and determine the internal transfer prices. Describe your
procedure.
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Transcribed Image Text:In a company operational activities are performed to fabricate products or to provide services. Within a company individual departments provide services not only for the main business but frequently also for other departments. Those services can be measured by their quantity, however due to lack of market prices they cannot be rated by values. The following table describes the services within the different department or for the main business as well as the primary costs of a company. recipient overall | primary ABC D|main business performance costs A 3 12 0 B1 21 1 C2 10 2 D0 1 14 1 6 10 5 24 1 6. 10 (a) Perform an internal cost allocation and determine the internal transfer prices. Describe your procedure.
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