Which division sets the minimum transfer price

Assignment Help Managerial Accounting
Reference no: EM132874481

Problem - Teslum Inc. has a number of divisions, including the Machina Division, a producer of high-end espresso makers, and the Java Division, a chain of coffee shops. Machina Division produces the EXP-100 model espresso maker that can be used by Java Division to create various coffee drinks. The market price of the EXP-100 model is $950, and the full cost of the EXP-100 model is $475.

Required - Now suppose that Teslum allows negotiated transfer pricing and that Machina Division can avoid $135 of selling expense by selling to Java Division. Which division sets the minimum transfer price, and what is it? Which division sets the maximum transfer price, and what is it? Do you suppose that Machina and Java divisions would choose to transfer somewhere in the bargaining range?

Reference no: EM132874481

Questions Cloud

Is Falconer creating or destroying wealth : Falconer Company had net (after-tax) income last year of $12,375,400 and total capital employed of $111,754,000. Is Falconer creating or destroying wealth
How does dialogue differ from discussion : Q1. Why do you think that storytelling is such a powerful means of communicating for a leader? How is active listening related to storytelling?
Experience creating and administering formal interviews : 1. Among the materials that Madeline Combs provided to you for your feedback is an application form. Evaluate the application form and discuss whether there are
What know of the patient and care : You encounter a peer's note that does not appear to be accurate given what you know of the patient and care. How do you address the issue?
Which division sets the minimum transfer price : Which division sets the minimum transfer price, and what is it? Which division sets the maximum transfer price, and what is it
Analyze intervention and treatment needs of family members : Analyze intervention and treatment needs of family members and significant others affected by chemical dependency.
Changing the business model : Define synopsis and include a definition for which you will include a source and "properly" cite. Identify Dell's resources, capabilities, and core competencies
Identify community support resources for clients : Recommend psychopharmacologic treatments based on therapeutic endpoints for clients with schizophrenia spectrum and other psychotic disorders
What will the transfer price be : If Burt has a transfer pricing policy that requires transfer at full cost, what will the transfer price be

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

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