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transfer pricing

Forums › ACCA Forums › ACCA PM Performance Management Forums › transfer pricing

  • This topic has 7 replies, 2 voices, and was last updated 10 years ago by John Moffat.
Viewing 8 posts - 1 through 8 (of 8 total)
  • Author
    Posts
  • October 1, 2014 at 3:08 am #202714
    fahad
    Member
    • Topics: 24
    • Replies: 114
    • ☆☆

    In Q 69.4 bpp revision kit dec2014-june2015 how is the maximum transfer price set 25$ ?? Isn’t it lower of external market price and NMR ?

    October 1, 2014 at 6:58 am #202731
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    It is a poorly worded question from BPP.

    The ‘market price in the external market’ is meant to be the price that Division A can sell it at (not the price that Division B can buy it for).

    The question does not make that clear (although it does refer later to external market demand which I suppose is a clue!).

    October 1, 2014 at 12:06 pm #202812
    fahad
    Member
    • Topics: 24
    • Replies: 114
    • ☆☆

    Ooh okay thanks

    October 1, 2014 at 4:53 pm #202845
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    You are welcome, Fahad 🙂

    October 4, 2014 at 6:46 am #203430
    fahad
    Member
    • Topics: 24
    • Replies: 114
    • ☆☆

    In the question 72.8 the center manager is considering to sell machine and that machine would add 2500 to divisional profit next year , when we are preparing the ROI for next year why is the profit of 2500 being deducted instead of increasing profit ?

    October 4, 2014 at 9:10 am #203446
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    The question says that the machine they are considering selling is already included in the forecasts.

    So if they sell the machine and buy the new one, then the forecast profit will fall by the 2500 because of the one being sold, and increase by 5200 due to the new one being bought.

    (When it is a new topic, please start a new thread. This has nothing to do with transfer pricing 🙂 )

    October 4, 2014 at 11:30 am #203466
    fahad
    Member
    • Topics: 24
    • Replies: 114
    • ☆☆

    Oh my apologies

    October 4, 2014 at 1:50 pm #203479
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54700
    • ☆☆☆☆☆

    No problem 🙂

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