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I got learning curve question it was hard and found one more question which was about pricing demand equation it was hard part b was hard . C was good and A was mixture
Did somebody got operational and planning variances in section C? What were the answers?
What did you guys get for the transfer pricing profit statements
And the planning and operational variances in section 3I got that same $710 but adverse.. the rest were favorable.. lol idk if i added them incorrectly.
I don’t remember exactly but I know bed was loss making due to the intercompany costs of the mattresses from mattress division
Yeah i got that they were making a loss from that aswell.
But they were still making a loss even without it ( not as much as before)
I thinnk i did something wrong but im not sureI applied my costs to their sales of 360k units
I really dont know what i did wrong but their variable costs were just too high.
It was 720 while mattress was like 220Did anyone get the transfer pricing question on lamps? Was the answer to provide externally first or internally?
@Saulatr why do you say that?
Because in entering formula i think have substracted first box above the box in which i entered the formula
@nicolita Yeah I got that, I chose to sell externally first and then the spare capacity to c div as otherwise it will make a loss of v.c on lamps. And on the div c side it should buy 50k from external supplier and the rest of 70k spare from div L/lamp to maximize the organisations profit. I hope this is correct
In Transfer Pricing question, we had to deduct (390 from 720 ) as that was the Total VC ! It was mentioned in the scenario !! Bed Division bought mattress from Mattress division for 390. It should be shown as a internal transfer & it would be worthless to Calculate 720 for external cost.
Hmm… i beleive i misunderstood.
I included the 390 as the price that division bed would acquire the mattresses from division mattress.
But i dont remember seeing anything about variable costs for division bed except in the notes where it was stated that division Bed would incur divison mattress variables costs (not selling) for the internal transfer of the mattresses. And that the variable selling costs would only be used for the amounts that were sold externally.What about for the purchase from the external supplier for $370 what profit did u get for bed?
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What did you guys get for the rate of learning in the learning curve question ?
@jonny138
The total Variable Production cost for Division Bed was 720 which is inclusive of 390. & Bed Division already bought it from Matress division which we needed to show as internal transfer cost for Bed Division & as we have included this in the internal transfer cost we have to decuct it from 720 for Calculating the External variable cost. If we don’t do this, 390 will be charged twice. They mentioned this in the scenario.
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