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Elementary,Middle School,High School,College,University,PHD
Teaching Since: | Apr 2017 |
Last Sign in: | 235 Weeks Ago, 2 Days Ago |
Questions Answered: | 12843 |
Tutorials Posted: | 12834 |
MBA, Ph.D in Management
Harvard university
Feb-1997 - Aug-2003
Professor
Strayer University
Jan-2007 - Present
lIl-‘tuestlon 2 —Transfer Pricing {‘tltI marks} The following discussion presents hypothefical information relating to the supply of lithium—ion
batteries between Apple's Eggbattery and assembly departments. Lidaicm-ion m Battccty Mum Pm Macon
Dire-cl Mamas scum
Direct Lab-nu: $IIIII.III
Variable Dvcrbcsd $III|IJII
Fixed Overhead $5 so
Required: ‘1. Outline why Apple should establish a transfer price for internal sales of batteries
between the battery and the assembly departments. Discuss the benefits and
problems associated with three methods by which the price of these transfers could
be established. Which method is most appropriate and why? [4 Merits) 2. Assuming the transfer price for battery sales between the battery department and
assembly department was established through negotiation between managersI
identify the likely range of possible transfer prices. {2 Marks} 3. Calculate the transfer price for battery sales between the battery department and the
assembly department if cost-plus pricing, based on 1309f: of variable manufacturing
cost' is used. {2 Marks] It. Illustrate how the application of the general transfer price mle for battery sales
between the battery department and the assembly department would result in different prices depending on whether the battery department had spare capacity or
othenuvise. [2 Marks] Ensure that your answers for the above are discussed and supported by relevant
calculationsfworkings.
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