Concept introduction:
Transfer pricing is a method in which the company settles a price of transferring one product from one department to other department. For example, a company transfers some goods to an associate company, and then this item is transferred at some pre-determined transfer price.
Requirement-1:
To identify:
Whether department accept the offer at transfer price of 18.
Concept introduction:
Transfer pricing is a method in which the company settles a price of transferring one product from one department to other department. For example, a company transfers some goods to an associate company, and then this item is transferred at some pre-determined transfer price.
Requirement-2:
To identify:
Net income of the department if offer of 18 transfer price is accepted.
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Managerial Accounting
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- Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College