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Marginal cost (transfer pricing) pls help

Forums › ACCA Forums › ACCA APM Advanced Performance Management Forums › Marginal cost (transfer pricing) pls help

  • This topic has 2 replies, 2 voices, and was last updated 12 years ago by Amarain.
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  • May 25, 2013 at 12:16 pm #127143
    hunnain
    Member
    • Topics: 2
    • Replies: 18
    • ☆

    the ideal situation, if a spare capacity exists is to transfer units at a marginal cost per unit.
    is the marginal cost per unit equal to VARIABLE COST PER UNIT or CONTRIBUTION PER UNIT??
    pls help. i have seen many solutions using both. but i want to know which one is right..

    May 25, 2013 at 1:09 pm #127147
    hunnain
    Member
    • Topics: 2
    • Replies: 18
    • ☆

    the latest lsbf mock has used the contribution per unit as the marginal cost. i think this is wrong? or correct me pls. thankyou

    May 26, 2013 at 7:41 am #127204
    Amarain
    Member
    • Topics: 5
    • Replies: 70
    • ☆☆

    Hi hunnain,
    If spare capacity exist and there is not an external market best for the company is to transfer at VARIABLE COST. If you could tell me what that Q you have seen says I might be able to help.
    Amarain

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