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April 11, 2022 at 12:19 am
Hello I wanted to know what we would have picked as our TP if in example 5 A could sell goods externally for $30
January 20, 2022 at 6:49 pm
Hey John, Is it possible for a question in PM to ask on transfer price between 3 divisions : A B C ?
June 3, 2021 at 3:15 pm
Mr Jonn, i must say ur REALLY CUTE!
Thank you for the lecture!
John Moffat says
June 3, 2021 at 3:48 pm
Thank you for the comment 🙂
May 10, 2021 at 8:20 pm
Hi John, in all the examples that we solved, the external purchase/sales remain un-favorable somehow. Carious to know what would happen if it become favorable? does the division A or B go external or would they prefer to remain within the company despite external option is favorable?
May 11, 2021 at 8:05 am
If the minimum TP is higher than the maximum TP then there will not be a TP that will satisfy both divisions and so there will not be a transfer. This will automatically be better for the company as a whole.
January 25, 2023 at 3:17 am
you haven’t talked about full price and opportunity cost approaches of transfer prices.
January 25, 2023 at 7:52 am
I do mention full cost and the assumption that makes it irrelevant, and the opportunity cost is of course the lost contribution which is the basis of most of what we do. The lectures cover everything that has ever been asked in transfer prices in the team !!
February 20, 2021 at 11:35 am
18:57 lost contribution is also known as opportunity cost innit?
February 20, 2021 at 2:12 pm
It is an example of an opportunity cost
November 9, 2020 at 9:21 pm
HI john, hope u are doing good.
am a bit confused with the transfer pricing. these two questions will help me allot to understand my issue.
1.does any price between minimum TP and maximum TP always leads goal congruent.
2. and what happens, for instance if the transfer price is not with in the range of the sensible transfer price, assuming that divisional managers have autonomy to buy and cell form external market.
forward looking to to see your wonderful explanation john. thanks in advance.
November 10, 2020 at 7:50 am
2. Then they should not transfer and should buy or sell to the external market.
November 10, 2020 at 2:03 pm
thanks john for you support, I am really appreciated? .
referring to Q2. how it will affect company as hole.
November 10, 2020 at 2:22 pm
The company as a whole will make more profit by not transferring. but by selling/buying externally.
October 26, 2020 at 7:08 pm
Dear John Sir,
How are you? I hope you are great, Thank you for your informative lecture and your time . Thank you so much.
September 15, 2020 at 6:45 am
Also sir the net marginal revenue is after deducting all Variable costs and FOAR/unit, right?
September 15, 2020 at 8:59 am
The net marginal revenue is after deducting the variable costs in that division.
October 29, 2020 at 7:02 pm
Why not contribution margin instead of net marginal revenue.
October 30, 2020 at 8:42 am
The contribution (contribution margin is not a term) would be after subtracting all variable costs including the cost charged by the other division, and that is what we are trying to calculate.
September 15, 2020 at 5:13 am
Sir the transferring-in division will be the division buying goods and transferring-out would be the selling division, right?
The transferring out division is the division transferring goods to the other division. The transferring in division is the division that receives goods from the other division (and then sells them externally)
February 6, 2020 at 10:42 am
wow i have never understood transfer price this well. thanks dear Tutor
November 5, 2019 at 10:00 pm
In example 6 , im confused with the $5 contribution that the division A lost
November 6, 2019 at 7:02 am
If they sell the goods externally then they get $20 revenue and the cost is $15, so they make a contribution of $5. If they cannot sell externally then they will lose that $5 contribution.
August 27, 2019 at 10:55 pm
Thank you for the lectures.
August 4, 2019 at 3:44 pm
I am confused with the full cost and marginal cost for transfer pricing. Full cost is VC + FC + markup = Transfer pricing. As you always mentioned in short term, FC is excluded. Am I right?
August 4, 2019 at 3:57 pm
Is transfer pricing is always marginal cost???
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