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Transfer price Bodge co kaplan question number 222

KKanan5y ago
Hi Dear Tutor, I will be having some questions. ------------------------------------------External sales---------------------sales to painting division Sales revenue @ 30$each------------24000 (800 units) Sales revenue @25 each-------------------------------------------------25000 (1000units) Variable costs------------------------------(12000)--------------------------(15000) Fixed costs---------------------------------(4000)---------------------------(4500) Profit------------------------------------------8000----------------------------5500 Multiple choice question number 4 buying from external supplier ------------------------------------------External sales---------------------painting division Sales revenue @ 30$each------------24000 (800 units) Sales revenue @50 each-------------------------------------------------50000 (1000units) External purchase cost @24$--------------------------------------------(24000) Variable costs------------------------------(12000)--------------------------(15000) Fixed costs---------------------------------(4000)---------------------------(4500) Profit------------------------------------------8000----------------------------6500 Profit change: 8000-5500=2500 Profil change 8000-6500=1500 Overall profit change=1000 I solved the question 4 without seeing the answer of the book and I found it correctly (I solved it by constructing the map how you made it on your free lecture explanation) there is also question 2 and I did not understand it and it says "What will be the monthly drop in the profit of the Pottery division"?the question 2 is not direct like the question 4.It should have asked in which case like the question 4.How can I know what the examiner asks me? My other question are in the followings: could we consiider the maximum production capacity of Pottery is 1800 units (800+1000)? It says the painting division sells to outside customer at 50$ each by incurring variable costs. the variable cost of Painting division is 15$ (15000/1000) and if we deduct 15$ from 50 external selling price it amounts to 35$ each but the transfer price is 30$? what is the rest 5$ here considered? could we consider 15$ is the variable cost for both divisions? Potter division 12000/800=15$ Painting division 15000/1000=15$
John MoffatJohn MoffatTutor5y ago#1
I am sorry but I really need to have the whole question in front of me, but I do not have the Kaplan Exam Kit. I can only help with past exam questions or with questions that are in the current edition of the BPP Revision Kit. (And, sorry again, but posting the entire question here is not allowed because it would be against the law due to copyright.)
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