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Sir, Is it true that due to limited labor hours available we have capacity limitations (in example 8 of chapter 18 – Transfer Pricing)?
So we have to use key factor analysis (similar to Throughput accounting) in order to know which product should be made first by taking out contribution per hour (which is obviously what u did in your lecture :)) but my question is that whenever we have limitations on material kgs or labor hours available we need to use key factor analysis even in transfer pricing?
Otherwise if we don’t have limitations of material kgs or labor hours then we need to answer according to what u did in another example 6.
The only point we use key factor analysis is because we have limited labors?
All correct? Sorry I had to ask this again. This is chapter Transfer Pricing
Yes, you are correct 🙂