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Transfer pricing 2

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Transfer pricing 2

  • This topic has 1 reply, 2 voices, and was last updated 8 years ago by John Moffat.
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  • January 23, 2017 at 3:18 pm #369041
    mmensah
    Member
    • Topics: 39
    • Replies: 43
    • ☆☆

    Hi Sir.

    I saw this example in my book and wondered if you could help?

    D LTD uses cost based transfer pricing. Du division has cost of 300 per a unit. Da has divisional cost of 250. What will DA’s total cost per unit be if there is a mark up of 60%?

    How do I know who is selling to who? the only different thing mention is one has divisional cost, the other has cost?

    January 23, 2017 at 8:46 pm #369099
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54701
    • ☆☆☆☆☆

    It makes no difference whatsoever as far as the total profit for the company is concerned. The total cost per unit is 300 + 250 = 550.

    See my answer to your other question, and do watch the free lectures on this.

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