Effect of full-cost transfer pricing method

Assignment Help Managerial Accounting
Reference no: EM13530653

Phipps manufactures circuit boards in Division A, a country with a 30% income tax rate, and transfers them to Division B, a country with a 40% income tax. An import duty of 15% of the transfer price is paid on all imported products. The import duty is not deductible in computing taxable income. The circuit boards'' full cost is $1,000 and variable cost is $700; they are sold by Division B for $1,200. The tax authorities in both countries allow firms to use either variable cost or full cost as the transfer price.

The Assignment:

Part 1: Analyze the effect of both full-cost and variable-cost transfer pricing methods on Phipps' cash flows using a spreadsheet program such as Excel.

Part 2: Make your recommendation as to how the organization should proceed, being sure to justify your recommendation with examples form this week's resources, and/or additional research. Complete this aspect of the Assignment by using a word processing program such as Word.

Reference no: EM13530653

Questions Cloud

Evaluated for the liquid tend to be larger : If your pipet was incorrectly calibrated so that it transferred 5% too much solution, would the density you calculated for the liquid tend to be larger or smaller than the correct value
Find the total potential at the given location : The drawing shows four point charges. The value of q is 1.83 µC, and the distance d is 0.99 m. Find the total potential at the location P
Find what is the stopping distance now : When a car is traveling at 25 m/s on level ground, the stopping distance is found to be 22m. What is the stopping distance now, as measured along the incline
Find what is the electric potential midway between them : Two point charges, +3.33 µC and -6.70 µC, are separated by 1.29 m. What is the electric potential midway between them
Effect of full-cost transfer pricing method : Analyze the effect of both full-cost and variable-cost transfer pricing methods on Phipps' cash flows using a spreadsheet program such as Excel and complete this aspect of the Assignment by using a word processing program such as Word.
Evaluate the average net force exerted on the car : In the amusement park ride known as Magic Mountain Superman, powerful magnets accelerate a car and its riders from rest to 45.9 m/s in a time of 8.93 s. Find the average net force exerted on the car and riders by the magnets
Calculate the magnitude of the magnetic force on the wire : A 7.70cm length of straight wire runs horizontally along a north-south line. Find the magnitude of the magnetic force on the wire
Find what range of speeds can the object have : A light string can support a stationary hanging load of 24.6 kg before breaking. What range of speeds can the object have before the string breaks
Choose a technology dominance battle : Choose a technology dominance battle that led to a technology standard

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Journalize the treasury stock transactions

The corporation sold 1,200 shares of treasury stock for cash at 72 per share. Journalize the treasury stock transactions.

  Should the company accept the special order

List and describe other factors should be taken into consideration when deciding whether to accept a special order and except that the company is producing 40,000 units per month. Should the company accept the special order? Why or why not?

  Prepare management accounting information

Prepare and hand in a Project Proposal that includes the nature of the project, the sources of information you plan to use, and the most important concepts and techniques to be applied.

  Determine the total cost per unit for each product

Determine the total cost per unit for each product using traditional job-order costing and determine the total cost per unit for each product using activity based costing

  What are the components of budget

What are the components of a budget? Are they same for every organization? Why or why not? Should every organization forecast its operating budget? Why or why not?

  Accounting-management control systems

Jack's Outdoor World is the company which manufactures and sells garden furniture. They've been operating for past ten years and have the comfortable share of market.

  Reconcile the differences in income

Prepare an absorption-costing income statement and prepare a variable-costing income statement - Reconcile the differences in income

  Relationship between fixed-variable costs used in flexible

Describe the relationships between fixed and variable costs employed in flexible budget and the differences between static and flexible budgets?

  Prepare a production report for the department

Prepare a production report for the department using the weighted-average method.

  Project’s net present value

In 2010, the Bayside Chemical Company prepared the following analysis of an investment proposal for a new manufacturing facility: . Do you have any suggestions that might increase the project’s net present value? (No calculations are required.)

  Describing cost-volume-profit

Disk City, Inc. is a retailer for digital video disks. The projected net income for the current year is $2,740,000 based on a sales volume of 270,000 video disks.

  What would the selling price

Assume that Lynn Company sells the same number of units in 2009 as it did in 2008. What would the selling price have to be in order to reach the stockholders' desired profit level?

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