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Marginal cost (transfer pricing) pls help

This topic has 2 replies, 2 voices, and was last updated 11 years ago by Amarain.

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May 25, 2013 at 12:16 pm #127143
hunnain
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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
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- Topics: 2
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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
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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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