• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • CIMA Forums
  • Ask CIMA Tutor
  • FIA
  • OBU
  • Buy/Sell Books
  • All Forums
  • Latest Topics

PQ Awards Nominations

Please help us to win one of the PQ Magazine awards and send in the voting form >>
You can nominate us in any or all of the following categories: Online College of the Year, Study Resource of the Year, Private Sector Lecturer of the Year, and Accountancy Personality of the Year.

Specially for OpenTuition students: 20% off BPP Books for ACCA & CIMA exams – Get your BPP Discount Code >>

Transfer Pricing Internally between Divisions

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA PM Exams › Transfer Pricing Internally between Divisions

  • This topic has 3 replies, 2 voices, and was last updated 1 year ago by John Moffat.
Viewing 4 posts - 1 through 4 (of 4 total)
  • Author
    Posts
  • April 22, 2021 at 7:56 pm #618546
    jkalou
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    So i am having a struggle with this exercise.
    The company XYZ have two divisions, the Division A and the Division B.
    Division B monthly purchase 10.000 units to Division A, using as PTI total cost plus
    5%. It is also known that the fixed costs incurred corresponding to 33% of total cost.
    However, the Division A modernized its production equipment and wants to increase
    the PTI to 18 euros/units.
    The manager of Division B argues that it cannot support the new value as this would
    lower their results to close to zero. Alternatively, the Division B can buy to an external
    supplier for 16,5 euros/ unit., benefiting in this case a 45-day payment (cost of capital
    opportunity is 4% / quarter). The Division A has no alternative use for this material.
    Request:
    Setting a price range for this transaction.

    April 23, 2021 at 7:31 am #618566
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51582
    • ☆☆☆☆☆

    A question could not be asked in this form in the real exam.

    However, as I explain in my free lectures, the minimum transfer price will be the marginal cost of production in Division A. The maximum transfer price will be the external purchase price.

    April 26, 2021 at 1:45 pm #618883
    jkalou
    Member
    • Topics: 2
    • Replies: 1
    • ☆

    Hello,thanks for you replying.

    Could you be more specific on this exercise, using numbers ?

    I will appreciate your answer because i get frustrated on this one.

    Thank you in advance

    April 26, 2021 at 3:23 pm #618888
    John Moffat
    Keymaster
    • Topics: 56
    • Replies: 51582
    • ☆☆☆☆☆

    I cannot spend the time on this because, as I wrote before, a question could not be asked in this form in the Paper PM exam.

    Have you watched my free lectures on this?

    Also, which are you attempting a question for which you do not have an answer. You should be using a Revision Kit from one of the ACCA Approved Publishers. This forum exists for you to ask about anything you are not clear about in our lectures or in past exam questions. It is not to provided with full answers to full questions 🙂

  • Author
    Posts
Viewing 4 posts - 1 through 4 (of 4 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

 

ACCA My Exam Performance for non-variant Applied Skills exams is available NOW

NEW! Download the ACCA Pass Guide

FREE Verifiable CPD for ACCA Members

ACCA mock exams and debrief videos

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

Donate

If you have benefited from OpenTuition please donate.

ACCA CBE 2023 Exams

Instant Poll * How was your exam, and what was the result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Specially for OpenTuition students

20% off BPP Books

Get BPP Discount Code

Latest comments

  • John Moffat on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • John Moffat on PM Chapter 13 Questions Standard Costing and Basic Variance Analysis
  • abdallah254 on FA Chapter 2 Questions The Statement of Financial Position and Statement of Profit or Loss
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures
  • Iby2012 on Introduction to Financial Accounting – ACCA Financial Accounting (FA) lectures

Copyright © 2023 · Support · Contact · Advertising · OpenLicense · About · Sitemap · Comments · Log in


We use cookies to show you relevant advertising, find out more: Privacy Policy · Cookie Policy