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transfer pricing

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › transfer pricing

  • This topic has 5 replies, 2 voices, and was last updated 8 years ago by John Moffat.
Viewing 6 posts - 1 through 6 (of 6 total)
  • Author
    Posts
  • May 7, 2017 at 2:03 pm #385190
    jean989
    Participant
    • Topics: 29
    • Replies: 9
    • ☆

    dear sir
    could u help me about these two question
    1st do it bring a positive or negative contn and how
    (1)
    frankie co has two divisions A and B. Division A makes a component at a marginal cost of $30 which it can only sell to Division B. Division A has no other outlet for sales.
    Division B takes A’s component and turns it into a finished good, incurring its own cost of $55 per unit and selling it externally at $120
    what is the minimum and maximum transfer price and if the company is making a positive or negative contribution?

    (2)
    Division A has decided it wants to maximise its own profits by selling externally at a price of $45 to customer co,after incurring distribution costs on external sales of $3 per unit.As before , Division A can also sell internally to Divison B
    Which of the following statements are correct?
    (1) The net sales price per unit Division A gets externally is $42
    (2)$65 is the maximum transfer price B will pay
    (3)If working at full capacity,$42 is the lowest transfer price Division A will accept
    (4)If there is spare capacity in Division A ,$30 is the lowest transfer price Division A will accept

    May 7, 2017 at 3:01 pm #385205
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    Unless you have been set this as a test question, you must have an answer in the same book in which you found the question. You should use this forum to ask about whatever it is in the answer that you are not clear about – then I will help you.

    I do suggest that you watch my free lectures on this – if you do then you should then find both these questions easy.

    The lectures are a complete free course for Paper F5 and cover everything needed to be able to pass the exam well.

    May 7, 2017 at 4:11 pm #385216
    jean989
    Participant
    • Topics: 29
    • Replies: 9
    • ☆

    thanks for ur help

    May 7, 2017 at 4:11 pm #385217
    jean989
    Participant
    • Topics: 29
    • Replies: 9
    • ☆

    it was of great help

    May 7, 2017 at 4:18 pm #385218
    jean989
    Participant
    • Topics: 29
    • Replies: 9
    • ☆

    BUT THERE IS NO POSITIVE AND NEGATIVE CONTRIBUTION IN THE LECTURES U CAN TELL ME WHERE IT IS

    May 7, 2017 at 7:46 pm #385245
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54699
    • ☆☆☆☆☆

    There is no need for sarcasm!

    Of course there is no mention of positive or negative contribution in the lectures – it would be ridiculous (and obvious anyway) to be asked that in real exam questions, and that part is nothing to do with transfer pricing anyway!!

    Again – it there is something in the printed answer that you are not clear about then ask and I will help you 🙂

  • Author
    Posts
Viewing 6 posts - 1 through 6 (of 6 total)
  • The topic ‘transfer pricing’ is closed to new replies.

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