Maurice Tutor

(5)

$15/per page/Negotiable

About Maurice Tutor

Levels Tought:
Elementary,Middle School,High School,College,University,PHD

Expertise:
Algebra,Applied Sciences See all
Algebra,Applied Sciences,Biology,Calculus,Chemistry,Economics,English,Essay writing,Geography,Geology,Health & Medical,Physics,Science Hide all
Teaching Since: May 2017
Last Sign in: 408 Weeks Ago, 2 Days Ago
Questions Answered: 66690
Tutorials Posted: 66688

Education

  • MCS,PHD
    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

Experience

  • Professor
    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 07 Oct 2017 My Price 10.00

Phoenix Inc.,

19-45 TransferPricing; Decision MakingPhoenix Inc., a cellular communication company, has multiple divisions. Each division’s management is compensated based on the division’s operating income. Division A currently purchases cellular equipment from outside markets and uses it to produce communication systems. Division B produces similar cellular equipment that it sells to outside

 

 

 

 

customers but not to division A at this time. Division A’s manager approaches division B’s manager with a proposal to buy the equipment from division B. If it produces the cellular equipment that division A desires, division B would incur variable manufacturing costs of $60 per unit.

 

 

Relevant Information about Division B

Sells 50,000 units of equipment to outside customers at $130 per unit.

Operating capacity is currently 80 percent; the division can operate at 100 percent. Variable manufacturing costs are $70 per unit.

Variable marketing costs are $8 per unit. Fixed manufacturing costs are $580,000.

Income per Unit for Division A (assuming parts purchased outside, not from division B)

Sales revenue Manufacturing costs:

Cellular equipment

80

  

$320

Other materials

10

    

Fixed costs

40

    

Total manufacturing costs

    

130

Gross margin Marketing costs:

Variable

35

  

190

Fixed

15

    

Total marketing costs

    

50

Operating income per unit

    

$140

Required

1. Division A wants to buy all 25,000 units from division B at $75 per unit. Should division B accept or reject the proposal? How would your answer differ if (a) Division A requires all 25,000 units in the order to be shipped by the same supplier, or (b) Division A would accept partial shipment from Division B?

2. What is the range of transfer prices over which the divisional managers might negotiate a final transfer price? Provide a rationale for the range you provide.

Answers

Maurice Tutor
(5)
Status NEW Posted 07 Oct 2017 10:10 PM My Price 10.00

Hel-----------lo -----------Sir-----------/Ma-----------dam-----------Tha-----------nk -----------You----------- fo-----------r u-----------sin-----------g o-----------ur -----------web-----------sit-----------e a-----------nd -----------and----------- ac-----------qui-----------sit-----------ion----------- of----------- my----------- po-----------ste-----------d s-----------olu-----------tio-----------n.P-----------lea-----------se -----------pin-----------g m-----------e o-----------n c-----------hat----------- I -----------am -----------onl-----------ine----------- or----------- in-----------box----------- me----------- a -----------mes-----------sag-----------e I----------- wi-----------ll

Not Rated(0)