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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.
John Moffat says
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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