- This topic has 1 reply, 2 voices, and was last updated 3 years ago by
.
Viewing 2 posts - 1 through 2 (of 2 total)
- Posts
The following question is from an examiner report
Conference Co has a divisionalised structure. One of its divisions, Division X, sells all its output to other divisions within the company.
Division X’s annual budgeted output and costs are as follows:
Units sold 1,050
Direct materials $22,500
Direct labour $45,350
Overheads (40% variable) $37,150
What transfer price per unit will result in a profit margin of 20% for Division X (to the nearest
whole $)?The examiner has used the full COP to then calculate the transfer price. So the and he provided is 125
I thought the selling division sets the minimum transfer price which is the marginal cost in this case. why has the examiner included fixed costs Sir?
Viewing 2 posts - 1 through 2 (of 2 total)
- You must be logged in to reply to this topic.