When the Selling Division can fill all its regular orders and has enough capacity to supply the Purchasing Division, what is the highest transfer price the Purchasing Division would be willing to pay? Variable cost of producing and selling a unit of product. The Purchasing Division's regular purchase price from its external supplier. O The full absorption cost of producing a unit of product. The market price charged to regular customers less any costs saved by transferring internally

When the Selling Division can fill all its regular orders and has enough capacity to supply the Purchasing Division, what is the highest transfer price the Purchasing Division would be willing to pay? Variable cost of producing and selling a unit of product. The Purchasing Division's regular purchase price from its external supplier. O The full absorption cost of producing a unit of product. The market price charged to regular customers less any costs saved by transferring internally

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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A company manufactures a single product, product Y. It hasdocumented levels of demand at certain selling prices for thisproduct as follows: Demand Selling price per unit Cost per unit Units £ £ 1100 48 24 1200 46 21 1300 45 20 1400 42 19 Required:Using a tabular approach, calculate the marginal revenues andmarginal costs for product Y at the different levels of demand, andso determine the selling price at which the company profits aremaximized.
QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Projected revenue Unit-level costs Batch-level costs Product-level costs Facility-level costs What is the differential revenue for this decision? Multiple Choice O $110.000 $85,000 $205,000 Alternative A $205,000 39,000 26,500 29,000 24,000 $290,000 Alternative B $290,000 50,000 38,000 31,000 26,500
In order to determine the optimal sales mix for a company, one should evaluate the contribution margin per unit of whatever the scarce resource is True or Faise
1. What would be the gross margin for FPD if it accepted the transfer price that will be charged by CD?
When performing sales mix analysis, which one of the following is true: O a. Producing and selling more units of the product with a higher contribution margin would likely decrease the breakeven point O b. Normally the calculation of the breakeven point for multiproduct is much simpler than that for a single product. O c. The sales mix is usually assumed to change. O d. Making changes to the sales mix will likely cause no change in the breakeven point O e. Shifting the sales mix to the product with a lower contribution margin will likely increase the overall contribution margin DUS PAGE NEXT PAGE F8 F9 F10 F11 F4 F5 F6 F7 F1 F2 F3 * @ 2# % & 1 2 3 6 7 W E T Y F J K A 1. C {V }BYN í M 41 * N
Subject :- Accounting
When negotlating a transfer price, whlch prlce Is most acceptable to the selling divislon if they are operating with Idle capacity? Multiple Choicel the price must cover at least the variable manufacturing costs of the selling division the price must be less than the variable manufacturing costs of the selling division the price must cover at least the variable manufacturing costs of the buying division the price must cover at least the selling price to outside customers
Solve 2, the first answer is the wrong. Find the lowest acceptable transfer price.
H
Many organizations use transfer pricing when transferring products between different divisions of the same organisation. Critically discuss the advantages and disadvantages of the method: Full cost transfer prices. Note: Define, explain gives examples and advantages and disadvantages
When the selling division is a full capacity, the goal congruent transfer price will be the: market price actual full cost actual variable cost standard full cost actual variable cost plus markup
Using the formula in the text, if the lowest acceptable transfer price from the viewpoint of the selling division is $95 and the opportunity cost per unit on outside sales is $38, then the variable cost per unit must be: